Tax relief packages for businesses in Germany are announced

Germany’s finance ministry plans to offer companies a tax relief package of around 6 billion euros per year against the backdrop of a challenging economic environment. German business morale has been deteriorating in the latest years.

According to Finance Minister Christian Lindner “The economy needs stimulus – rarely has this been so urgent as now”. The draft legislation includes almost 50 tax policy measures, mainly aimed at small and medium-sized enterprises.

Lindner’s package provides stronger tax incentives for research. It also would allow companies to offset more losses against profits from other financial years and make it possible to take write-offs for low-value assets more quickly.

The tax relief plan will be part of the draft Growth Opportunities Act, which the Free Democrat Lindner has proposed to make Germany more competitive amid high energy prices and burdensome bureaucracy.

The draft legislation includes a total of almost 50 tax policy measures, mainly aimed at small and medium-sized enterprises, the sources said. One key provision incentives companies to invest in climate protection by offering tax benefits between 2024 and 2027 if they make climate-friendly investments.

While the business community welcomed the initiative, the other coalition parties have shown skepticism in certain areas. The Federation of German Wholesale, Foreign Trade and Services (BGA) held the plans. “Tax simplifications and better depreciation options are important incentives for more investment in Germany,” said BGA President Dirk Jandura.

SPD politician Michael Schrodi said the proposals would significantly decrease revenue from corporate taxes. “This particularly affects the municipalities, whose budgetary situation is more critical than that of the federal and state governments,” SPD Bundestag member Lennard Oehl said.

Source: Reuters