German finance ministry dismisses report on tax relief proposals

BERLIN, June 15 (Reuters) - Germany's finance ministry on Monday rejected a report that Finance Minister Lars Klingbeil had presented government coalition negotiators with two income tax reform proposals.

German news outlet Spiegel reported that the proposals included one that would provide moderate tax relief worth about €10 billion, while the other would offer a larger package of around €20 billion ($21.6 billion).

"The focus of the income tax reform will be on reducing the tax burden on people on low and middle incomes," a German finance ministry spokesperson told Reuters. "Work and achievement must be made more rewarding," they added.

Spiegel said Klingbeil is considering raising Germany's so-called "rich tax" rate, which stands at 45% and applies to single taxpayers with annual income of roughly €280,000 or more.

The plans would also raise the income threshold at which the 42% top rate applies. This currently kicks in at taxable income of about €70,000, and Spiegel said this move was likely aimed at winning support from the conservatives in the coalition.  

For the more costly version, Klingbeil is also proposing an inheritance tax increase alongside other measures, ahead of an expected ruling by Germany's constitutional court, Spiegel said.

The finance ministry spokesperson said Germany's coalition government would continue to discuss the details in private.

(Reporting by Maria Martinez and Holger Hansen, editing by Thomas Seythal and Alexander Smith)