Financial equalization

The state supports the municipalities to a significant extent in the fulfillment of municipal tasks. The main pillars of these financial benefits are the statutory share of the income tax and the payments within the framework of fiscal equalization.

The non-earmarked transfer payments are grouped under the term "financial allocations" and include 35% of the capital and income taxes of companies operating in the state, as well as financial equalization payments, the amount of which depends on a municipality's own per capita earning capacity.

The facts described regarding fiscal equalization are set forth in the Fiscal Equalization Act . The regulations on the direct tax shares of the municipalities are found in the Tax Act.

More detailed information on the annual financial equalization to the municipalities can be found in each case in the Accountability Report of the government.