Introduction of Tax Reliefs
Federal Finance Minister Lars Klingbeil (SPD) plans comprehensive tax reliefs for companies in Germany, which are expected to total 17 billion euros by 2029. These measures are part of a law aimed at strengthening Germany’s economic location and include several key elements.
Main Measures of the Tax Reliefs
- Investment Booster: This includes special depreciations of 30 percent for investments made in the years 2025, 2026, and 2027. These depreciations are to apply between June 30, 2025, and January 1, 2028.
- Reduction of Corporate Tax: After the three years with special depreciations, a reduction of corporate tax will follow. This is a long-term measure aimed at improving the competitiveness of German companies.
- Depreciations for Electric Vehicles: In the year of purchase, a depreciation of 75 percent for electric vehicles should be possible, which aims to encourage investments in environmentally friendly technologies.
Impact on the Economy and Investors
These tax reliefs could have several positive impacts on the economy:
- Investments and Economic Growth: Through the special depreciations and the reduction of corporate tax, companies could invest more, leading to an increase in economic growth.
- International Competitiveness: The planned tax reductions are intended to improve the international competitiveness of German companies, which is particularly important for the export sector.
- Reactions from Stakeholders: While the industry welcomes the tax reductions, the DGB warns of cuts in the public sector.
Challenges and Criticism
- Tax Revenues: The tax reliefs could lead to a decline in tax revenues, which could complicate the financing of public tasks.
- Budget Discipline: Federal Finance Minister Klingbeil emphasizes the need for budget discipline to manage the impact of the tax reductions on the federal budget.
Overall, the planned tax reliefs aim to strengthen Germany’s economic location and improve the competitiveness of companies. However, the potential impacts on public finances and social infrastructure must be carefully weighed.