# Germany Plans to Abolish Tax Classes III and V for Couples Finance Minister Lars Klingbeil proposes automated factor-based taxation to replace current unequal monthly deductions. - **Source:** [ZDFheute](https://www.zdf.de/nachrichten) - **Published:** 2026-11-12 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/1e6fd7f3-dfca-46a3-8043-6c61fef5b17b ## Proposed Tax Class Abolition German Finance Minister Lars Klingbeil plans to eliminate tax classes III and V for married couples. These classes currently allow for significant monthly net income differences, often disadvantaging the lower-earning partner. The government intends to replace this system with an automated factor-based method, which is a variation of the existing tax class IV. ## Mechanism of Factor Procedure The new factor procedure aims to distribute monthly tax payments more realistically between spouses. By calculating an individual factor, the system accounts for the marriage splitting benefit while avoiding the high deductions typically associated with tax class V. This shift is designed to reduce the frequency of tax payments owed at year-end. ## Impact on Financial Incentives Tax class V currently affects women disproportionately, as they often work part-time and handle more family responsibilities. High deductions in this class can discourage spouses from increasing their working hours. Experts suggest that moving to the factor-based model could improve net income for the lower-earning partner, potentially increasing social security benefits like sick pay. ## Administrative and Legal Goals The reform is slated to become part of the Tax Simplification Act 2027. The Ministry expects the change to reduce paperwork and alleviate the burden on tax offices. Currently, approximately twelve million married or registered partners are required to file tax returns due to the III/V combination, a figure expected to decrease significantly. ## Splitting Benefit Remains Intact The proposed changes do not eliminate the marriage splitting benefit itself. Under this system, the taxable incomes of both partners are combined and halved to calculate the total tax burden. The reform only alters the monthly distribution of tax deductions, not the total annual income tax liability for the married couple. ## Political Resistance and Concerns The reform faces significant political opposition, particularly from the CSU. Bavaria’s Finance Minister Albert Füracker argues that the change represents an unnecessary intrusion into the personal freedom of couples. Critics fear that mandating the factor procedure removes the ability for spouses to decide how they manage their monthly financial organization independently. ## Broader Reform Context Debate extends beyond tax classes, as Klingbeil has previously expressed interest in reforming the marriage splitting model entirely. His ministry introduced a 'fictional real splitting' model in 2026, which would tax incomes separately with transferable allowances. While distinct from the current tax class proposal, some politicians fear this is a precursor to deeper changes. ## Uncertain Legislative Future Whether the proposal to abolish tax classes III and V will successfully pass into law remains uncertain. While experts highlight the potential for fairer tax distribution, the political sensitivity regarding state influence on family finances is high. The government must navigate these concerns while balancing the desire for administrative efficiency and tax equity. ## Sources covering this story - https://www.zdfheute.de/politik/deutschland/steuerklassen-3-5-ehe-klingbeil-plan-reform-100.html — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._