Klingbeil intends to impose tax reductions for corporations
Finance Minister Proposes Comprehensive Tax Cuts for Businesses Worth 17 Billion Euros
Finance Minister Lars Klingbeil is advocating for extensive tax relief measures for businesses, according to the Handelsblatt. These measures, set to expand over the years, are projected to reach 17 billion euros by 2029.
Klingbeil, leading the German Federal Ministry of Finance, aims to implement several agreements from the coalition between the Union and SPD. These include an investment boost, a reduction in corporate tax, and new depreciation rules for electric vehicles.
The investment boost involves a special depreciation for companies investing in 2025, 2026, and 2027. The 30 percent depreciation will apply from June 30, 2025, to January 1, 2028.
The subsequent reduction in corporate tax is planned in five stages, starting from January 1, 2028. The rate will decrease from 15 to 10 percent by 2032. The tax research allowance is also set to be more advantageous. A special depreciation for companies purchasing electric vehicles is also proposed, with a 75 percent depreciation in the year of purchase.
As the relief mainly involves depreciation through the investment boost, the government's revenue will decline steadily. In 2025, the decline stands at 630 million euros, increasing to 17 billion euros in 2029. The tax losses are distributed among the federal government, states, and municipalities.
Some noteworthy details from enrichment data suggest that the tax cut proposal places significant emphasis on promoting investment in sustainable technologies and easing operational costs for energy-heavy businesses. Key aspects of Klingbeil's business tax-related initiatives include a special accelerated depreciation for electric vehicles starting July 2025 and measures to lower electricity prices for energy-intensive industries.
Source: ntv.de, lve/rts
[1] German Federal Ministry of Finance draft bill supporting business investment in green technologies.[2] Emphasis on infrastructure investment and energy price relief for energy-intensive industries as part of the SPD-led finance ministry's broader economic strategy.
- The German Federal Ministry of Finance, led by Finance Minister Lars Klingbeil, is proposing a comprehensive tax cut plan worth 17 billion euros by 2029 that includes measures such as an investment boost, a reduction in corporate tax, and new depreciation rules, with a focus on promoting investment in sustainable technologies and easing operational costs for energy-heavy businesses.
- In the context of the SPD-led finance ministry's broader economic strategy, the proposed tax cut plan highlights the importance of infrastructure investment and energy price relief for energy-intensive industries, as well as the introduction of a special accelerated depreciation for electric vehicles starting from July 2025.
