German tax administration backlogs and staff shortages

German tax administrations are experiencing significant operational challenges characterized by staff shortages and growing backlogs. In Bavaria, data from the Ministry of Finance indicates approximately 335,340 ongoing appeals against income tax assessments, with nearly half of these cases pending for more than two years. This surge in cases has coincided with a decline in administrative capacity, as full-time equivalent positions for processing these matters decreased between 2020 and 2026.

Broadening to other regions, staff shortages are contributing to a decrease in tax audits and delays in processing tax returns. In Lower Saxony, specific offices have reported processing times that exceed state averages. For instance, the Sulingen tax office reported processing times for employee returns of 43.3 days and 60.4 days for corporations, both of which were higher than the state averages. The Association of Taxpayers has set targets for processing times to be under 40 days for employees and under 50 days for the self-employed.

A joint analysis by BuchhaltungsButler and DataPulse Research highlights a systemic discrepancy: while Germany maintains the seventh-largest tax administration in the EU relative to its population—with 13.2 full-time positions per 10,000 inhabitants—it continues to struggle with vacancies. In 2024, 6,869 positions remained unfilled. Although planned positions rose between 2017 and 2023, actual personnel fell by 3.5% between 2014 and 2025, totaling 96,736 full-time equivalents. Germany also ranks third in the EU for administrative costs per 100 euros of tax revenue, trailing only Poland and Slovakia.