Income tax (abbreviation: ESt) in Germany is levied on the income of natural persons. It is levied per calendar year. Income tax is thus a personal tax that taxes the economic performance measured by the income of each individual. For the tax burden according to the economic capacity, several tariff zones with increasing tax rates up to 45% are used in the income tax. Based on these, it is possible that low earners are taxed at a lower rate than higher earners. In principle, the seven different types of income are taxed at the same rate. An exception, however, is the taxation of capital income with a tax rate of 25%. Income tax is a joint tax, since the distribution of tax revenues in Germany is made between the federal government, the states and the municipalities. It is the most important source of government revenue.
