Government grants substantial tax reductions for businesses via legislative endorsement
Hey there! Here's the scoop on the multi-billion-euro tax relief package the German government just green-lit. This bad boy's goal? To prop up the economy, particularly for '25 to '29, slashing businesses' tax burden by a whopping 46 billion euros. But it ain't all peachy - the feds, states, and municipalities need to brace for a decrease in tax revenue of a similar amount, and that might rub some wrong.
The action plan has plenty of juicy nuggets:
- Super-Depreciations: Businesses can write off 30% of their investments over three years.
- Tax Rate Reduction: The corporate tax rate will slowly decrease by one percent each year from '28 to '32, dropping to 10% from the current 15%.
- Electric Vehicle Boost: Not just the price cap but also a 75% tax write-off in the first year will be granted for electric company cars.
- Research Funding: Expect a bump in investments in research.
But Germany's economy's been in a slump for two years, with experts predicting stagnation for this year. The new government, led by Chancellor Friedrich Merz (CDU), aims to improve the economic mood by summer with this package, along with planned state investments in infrastructure and energy price relief[1][3][4].
But here's the kicker - this ain't the only party, uh, relief measure. Germany's also cookin' up an €500 billion infrastructure fund set for the next 12 years[2][4]. Shall we say, they're goin' all in on this economic recovery.
The financial relief package green-lit by the German government includes a measure to reduce businesses' tax burden, amounting to a substantial 46 billion euros. This reduction in business tax revenue is expected to be offset by super-depreciations, allowing businesses to write off 30% of their investments over three years.