Contribution to government revenue

Latest Update: November 2023

The extractive sector generates revenue for the state at the various federal levels. The most important revenues are the taxes from general company taxation (corporate income tax and personal income tax plus solidarity surcharge and trade tax), as well as mine site and extraction royalties specific to the natural resource extracted in each case. Together, these revenues from the extractive industry amounted to approximately €487 millions in 2021 (as of 09/2023). This represents 0.03% of total Federal Government revenue. More detailed information on this revenue can be found in Payment flows of the raw material sector. Other payments are also made by the extractive sector to the state, such as leaseholds, energy and electricity taxes (see Revenues generated), as well as payments relating to interventions in nature conservation legislation and water use (see Managing human intervention in nature and landscape), which are not described in this chapter.

Taxes

The sum of the above-mentioned taxes paid by the extractive industry in 2021 amounted to around €433m (as of 09/2023). This corresponds to a proportion of around 0.03% of the state’s total income.1 The largest amount of tax revenues is generated by trade, income and corporate taxes.

The following table shows the estimated revenues from the above taxes of the extractive industry and their share of the total tax revenue. Other payment flows not addressed in the following table are described in the sections Revenues generated and State subsidies and tax concessions.

Tax revenues from the natural resources sector (corporation tax, trade tax, income tax and the solidarity surcharge)

Type of tax

Year

2014

2015

2016

2017

2018

2019

2020

2021

in million €

Corporate tax

98

135

49

53

60

62

60

96

Trade tax

201

133

123

126

138

145

140

222

Income tax

61

62

65

64

67

70

68

108

Solidarity surcharge

9

11

6

6

7

7

7

7

Totals

369

341

243

249

271

285

275

433

Total income of the State

1,313,906

1,364,857

1,426,748

1,486,925

1,557,224

1,615,820 

1,569,061 

1,711,747 

Proportion of the above mentioned taxes compared to total revenues

0.03 %

0.02 %

0.02 %

0.02 %

0.02 %

0.02%

0.02%

0,03%

For information only

Updating factor

5.84%

2.09%

4.99%

-3.75%

59,09%

See detailed sources here:  View data . Own representation.

Extraction and minesite royalties

Extraction royalties are levied by the mining authorities of the Federal States. They vary greatly, depending on the local mining activity and the fixed tax rates in the individual Federal States.
 View data

Table: Revenue from royalties paid by the extractive sector in 2017 and 2021.

Extraction royalties in thousands of € 

2017

2018

2019

2020

2021

Federal State

Baden-Wuerttemberg

211

379

518

142

221

Bavaria

503

602

728

521

543

Berlin

0

0

0

0

0

Brandenburg

704

777

608

553

681

Bremen

0

0

0

0

0

Hamburg

90

108

168

100

107

Hesse

398

399

260

281

250

Mecklenburg-Western-Pomerania

636

633

947

284

859

Lower Saxony

180,737

153,652

135,393

52,383

-22,264

North Rhine-Westphalia

683

560

1,024

739

622

Rhineland-Palatinate

4,639

6,945

6,766

4,764

6,048

Saarland

74

62

0

15

22

Saxony

1,728

1,380

1,639

1,352

1,828

Saxony-Anhalt

1,547

2,375

2,142

2,198

2,202

Schleswig-Holstein

62,102

72,836

66,772

43,451

60,640

Thuringia

1,851

1,484

1,557

2,067

1,780

Total extraction royalties

255,902

242,192

218,523

108,835

53,540

Total income of the Federal State in millions of €
 

1,486,925 

1,557,224 

1,615,820

1,569,061

1,711,747

Proportion

0.02 %

0.02 %

0.01%

0.01%

0.003%

See detailed sources here:  View data . Own representation.
A total of €53.5 millions in extraction royalties was collected in Germany in 2021. The amount of revenue has fluctuated significantly in some Federal States in recent years. This may have different reasons, e. g. changes in world market prices for natural resources or changes in production quantities (for detailed source information see final note v).

Only a few Federal States publish their revenues from mine site royalties in their budgets. A summarised overview of the mine site royalties is not available. Most Federal States publish accumulated mine site and extraction revenues in their individual budgets. Their amount is significantly lower than the amount of extractive sector revenues. The revenue from the 2021 mine site royalties is only available for four Federal States: Bavaria, Brandenburg, Lower Saxony and Saarland (see table below):

Table: Revenues from mine site royalties earned from 2017 to 2022:

Mine site royalties in thousands of €

2017

2018

2019

2020

2021

2022

Federal State 

Bavaria

28.2

31.9

30.0

47.8

78.8

71.0

Brandenburg

7.9

60.1

21.6

0.0

0.0

0.0

Lower Saxony

560

476.7

296.7

708.3

526.4

519.5

Saarland

0

0

0

14.7

21.5

0

See detailed sources here:  View data . Own representation.
1 Based on a revised database, these figures have changed slightly since 2018 (see table Tax revenues from the natural resources sector).

CONTRIBUTION TO GOVERNMENT REVENUE

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Glossar

In Federal States in which legislation does not include an excavation law and the State-level Nature Conservation Law does not apply to the extraction of non-energetic, ground-based natural resources in the context of dry excavations, this type of natural resource extraction falls within the scope of the relevant state building regulations.

Legal limitations also exist: State building regulations apply to the excavation of solid rock (limestone, basalt, etc.), for example, in quarries with an area of up to 10 hectares (ha) in which no blasting is carried out. In the event that this area is exceeded, or if water bodies are formed after completion of the extraction operations, the German Federal Immission Control Act (BImSchG) and/or Water Resources Act (WHG) are applicable.
In Bavaria and North Rhine-Westphalia, the above-ground excavation of non-energetic, ground-based natural resources in the context of dry excavations is determined at state level by the existing excavation laws (AbgrG). For the excavation of solid rock (limestone, basalt, etc.) in quarries where blasting does not occur, the AbgrG applies to sites with an area of up to 10 ha. In the event that this area is exceeded, or if water bodies are formed after completion of the extraction operations, the German Federal Immission Control Act (BImSchG) and/or Water Resources Act (WHG) are applicable. In the other Federal States, this type of natural resources extraction is regulated by the respective state building regulations or by the state-level nature conservation laws.

In general, the AbgrG applies to those raw materials the excavation of which is not directly subject to mining law or the mining authorities. These raw materials include (in particular) gravel, sand, clay, loam, limestone, dolomite and other rocks, bog mud and clays. However, the jurisdiction between AbgrG and mining law can vary from case to case in the case of certain raw materials, such as quartz gravels. The requested authority must always verify its own jurisdiction in each case. The AbgrG also encompasses surface area usage and the subsequent rehabilitation of the area.
The German Federal Immission Control Act (BImSchG) is the most important and practice-relevant law in the field of environmental law. It constitutes the basis for the approval of industrial and commercial installations. In the natural resources extraction industry, quarrying companies must have approval to extract stones and earth. Every quarrying area of 10 hectares or more must undergo a full approval procedure, including public participation and UVP (environmental impact assessment). A more simplified approval procedure is used for quarrying areas of less than 10 hectares.

The sphere of responsibility for the legal immission control approval procedure is fully specified in the Immission Control Acts of the Federal States. The Federal States are tasked with the administrative enforcement of the approval procedure. Each individual state’s Environment Ministry – the highest local immission protection authority – usually bears the responsibility for this procedure. Subordinate authorities include regional councils, district authorities and lower-level administrative authorities. Administrative jurisdiction generally lies with the lower-level administrative authorities.
The GDP measures the value of goods and services produced domestically (creation of value) within a given period (quarter, year). The Federal Office of Statistics calculates the GDP as follows: production value minus intermediate consumption = the gross value added; plus taxes on products and minus subsidies = GDP
The gross value added is calculated by deducting intermediate consumption from the production values, so it only includes the value added created during the production process. The gross value added is valued at manufacturing prices, i.e. without the taxes due (product taxes), but including the product subsidies received.

During the transition from gross value added (at manufacturing prices) to GDP, the net taxes (product taxes less product subsidies) are added globally to arrive at an assessment of the GDP at market prices’. Source: Destatis
The planning approval procedure under mining law is used for the approval procedure of a general operating plan for projects which require an environmental impact assessment (§§ 52(2a), in conjunction with 57 a of the BBergG).
There are different definitions and methodological approaches at the international as well as at the national level as to what subsidies are and how they are calculated. According to the definition of the German government’s subsidy report, this report considers federal subsidies for private companies and economic sectors (ie grants as cash payments and tax breaks as special tax exemptions) which are relevant to the budget. Subsidies at the federal level can be viewed via the subsidy reports of the federal states (see Appendix 5 of the German government subsidy report).
In compliance with § 68(1), Water Resources Act (WHG), the excavation of landowners’ natural resources such as gravel, sand, marl, clay, loam, peat and stone in wet extraction operations requires a planning approval procedure. The reason for this is that groundwater is exposed in wet extraction, resulting in above-ground water. The planning approval procedure is implemented by lower-level water authorities.

The procedural steps of the planning approval procedure are governed by the general provisions of §§ 72 to 78 of the Administrative Procedures Act (VerwVfG). Within the meaning of § 68(3), nos. 1 and 2 of the WHG, the plan may only be established or approved if an impairment of the common good is not to be expected and other requirements of the WHG as well as other public-law provisions are fulfilled.