A complete exemption from taxes for indemnification payments made to Nazi victims has been approved by the Federal Council, upper house of the German Parliament, and will enter into effect January 1, 1955.
The measure, which had been introduced by the Social Democrats and opposed by Minister Fritz Schaeffer’s Bonn Ministry of Finance, is only one of numerous tax exemptions and tax slashes voted for other groups. Until now, many types of compensation were subject to a “retroactive income tax” computed at a flat rate of 10 percent.
The Social Democrats argued that the state should not take back with one hand what it reluctantly paid out with the other, and their position was upheld by deputies of the Christian Democratic Union and of the Free Democratic Party.
The new tax exemption is concerned with certain types of payment under the Federal Indemnification Law for individual claimants. It does not affect pension payments to former civil servants, rabbis and communal officials, or funds derived from the restitution of identifiable property.
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