The Planned Billion-Euro Tax Package
The German cabinet is planning a comprehensive tax relief package aimed at strengthening the economy and boosting investments. These measures, which include a variety of tax breaks, could have significant impacts on investors and savers in the German-speaking region.
Main Points of the Tax Package
- Tax Depreciation for Investments: Companies can depreciate investments in movable assets, such as machinery, by up to 30 percent in the years 2025, 2026, and 2027. This is intended to stimulate investment activity and improve the competitiveness of German companies.
- Promotion of Electric Cars: Enhanced depreciation options for business-used electric cars are planned to support the transition to more environmentally friendly vehicles.
- Reduction of Corporate Tax: Starting in 2028, the corporate tax is set to decrease, reducing the overall tax burden on companies to about 25 percent by 2032.
- Research Promotion and Profit Taxation: Tax incentives for research are to be expanded, and the tax rate on undistributed profits is to be lowered to encourage investments in research and development.
Impact on Investors and Savers
- Investment Incentives: The tax relief measures could motivate investors to invest more in Germany.
- Economic Stability: The measures aim to stabilize the economy and promote growth.
- Savings Incentives: The planned tax cuts could increase the attractiveness of investments in companies and redirect savings into investment activities.
Macroeconomic Effects
- State Finances: The tax relief will lead to a revenue shortfall of a total of 48 billion euros, which could have long-term consequences.
- Economic Growth: The measures are intended to increase economic growth and strengthen Germany’s competitiveness.
The tax package aims to strengthen the economy and promote investments, which could have positive effects on investors and savers. However, the long-term impacts on state finances and the overall economy also need to be considered.