Introduction
Federal Finance Minister Lars Klingbeil (SPD) has presented a comprehensive bill aimed at providing companies in Germany with tax relief totaling 17 billion euros by 2029. These measures are part of a tax investment immediate program designed to strengthen Germany’s economic location.
Central Measures
- Investment Booster: Companies will receive special depreciation for investments made between June 30, 2025, and January 1, 2028. During this period, they can claim depreciation of up to 30 percent for certain investments.
- Reduction of Corporate Tax: Starting in 2028, the corporate tax will be gradually reduced: The tax rate is to be lowered in five steps from currently about 15 percent to only around ten percent – this reduction is planned until 2032.
- New Depreciation for Electric Cars: A special depreciation is planned for companies purchasing electric vehicles: In the year of purchase, up to 75 percent of the purchase price can be depreciated.
- Expanded Research Grant: The tax research grant will be made more generous to further promote innovations.
Timeline and Volume
The tax reliefs will gradually increase over several years:
- Immediately: Special depreciations as an investment booster.
- From January 2028: Start of gradual reduction of corporate tax.
- Total Volume: The total relief is to reach around €17 billion by the year maximum.
Expected Impact
The planned tax cuts aim to stimulate corporate investments, strengthen Germany as an economic location, promote innovation, and advance sustainable mobility. The state’s revenue will decline with a time lag.
Overall, the package signals a strong commitment to supporting the German economy during a phase of global uncertainties and structural challenges.