Tax Relief for Companies
Federal Finance Minister Lars Klingbeil plans to present a draft law on tax relief for companies to the Cabinet. This draft includes several measures aimed at significantly relieving companies in Germany. Here are the main points:
- Investment Booster: The draft includes special depreciation for companies on investments in the years 2025, 2026, and 2027. These depreciations are expected to be 30% and will apply between June 30, 2025, and January 1, 2028.
- Reduction of Corporate Tax: After the end of the investment booster, corporate tax is to be gradually reduced from the current 15% to 10% by 2032. This reduction will take place in five steps starting January 1, 2028.
- Depreciations for Electric Cars: A special depreciation of 75% in the year of purchase is planned for companies acquiring electric cars.
- Retained Earnings Tax Rate: The tax rate on profits that are not distributed is to be lowered to provide companies with more investment opportunities.
- Tax Incentives for Research: The tax research grant is to be made more generous to encourage companies to invest more in research and development.
Impact and Volume of Tax Relief
- Volume of Tax Relief: The reliefs are expected to grow over the years. In 2025, the relief will be 2.5 billion euros, in 2026 it will be 8.1 billion euros, and by 2029 it is expected to reach 11.3 billion euros. The total amount of tax revenue losses will increase to 17 billion euros by 2029.
- Impact on the Federal Budget: The tax revenue losses will be distributed among the federal government, states, and municipalities. Initially, the revenue losses are minor, as the depreciations have a staggered effect. In 2025, the loss will be about 630 million euros, increasing to 17 billion euros by 2029.
Relevance for Investors and Savers
These tax reliefs could indirectly benefit investors and savers by promoting economic activity and investments in companies. Increased investment activity could lead to higher returns for investors, while savers could benefit from a stabilized economy.
Overall, the planned tax reliefs aim to strengthen the competitiveness of German companies and promote investments in promising areas such as research and electric mobility.