Klingbeil intends to reduce corporate tax rates
Business Tax Relief: Klingbeil Proposes Wide-Ranging Measures for Corporate Sector
According to a report in the "Handelsblatt," Finance Minister Lars Klingbeil is planning a comprehensive tax cut package for businesses. The relief, estimated to reach €17 billion by 2029, is designed to boost investment, reduce corporate tax, and facilitate the adoption of electric vehicles, the newspaper reports.
The proposed tax cuts include accelerated depreciation for companies investing in the periods 2025 to 2027, a phased reduction in corporate tax rates from 15% to 10% by 2032, and sector-specific incentives such as special depreciation for electric vehicles.
The investment boost entails a 30% depreciation of investments between June 30, 2025, and January 1, 2028. This would be followed by a gradual reduction in corporate tax rates, starting January 1, 2028. The rate would decrease in five steps, reaching 10% by 2032.
Special depreciation rules for certain sectors, such as electric vehicles, are also part of the plan, with a depreciation of 75% for businesses purchasing electric vehicles in the year of purchase.
The tax cuts, primarily through the investment boost, are expected to result in a decline in government revenue over time. The state's revenue is projected to decrease from €630 million in 2025 to €17 billion in 2029. The revenue losses will be shared among the federal government, states, and municipalities.
The proposed tax cut plan aligns with the coalition agreement between the CDU/CSU and SPD, aiming to provide long-term certainty for businesses and encourage reinvestment. The exact impact on government revenue by 2029 is contingent on future budget negotiations and economic conditions.
Source: ntv.de, lve/rts
- The proposed employment policy, as part of the tax cut package, includes accelerated depreciation for companies investing from 2025 to 2027, incentivizing businesses to invest and contribute to the overall economic growth.
- The finance minister's plan, which aims to boost investment and reduce corporate tax, also includes sector-specific policies such as special depreciation for electric vehicles, which could potentially attract investors interested in the finance and investing realm of the business sector.
