Tax reforms 2025: Germany's business boost with new relief!

Tax reforms 2025: Germany's business boost with new relief!

Deutschland - The federal government has great plans to improve the economic situation in Germany with extensive tax reforms. According to the information from Image , a draft lecturer is presented by the Federal Ministry of Finance under the direction of Lars Klingbeil (SPD). The black and red cabinet under Chancellor Friedrich Merz (CDU) could already decide on this tax package on Wednesday.

The package of measures is mainly about combating the current economic flaut. A central innovation is the introduction of the "degressive depreciation (AFA)" as an investment booster that is to be implemented this year. Companies have the option of asserting special depreciation of up to 30 percent in the first three years after investment of up to 30 percent. The structure is designed in such a way that more can be discontinued in the first year than in the following year, which creates additional incentive for investments.

long -term perspectives: corporation tax and thesauring tax rate

Another highlight is the gradual reduction in corporation tax, which is to take place by one percentage point each from January 1, 2028. The aim is to reduce corporation tax rate to ten percent by 2032. The thesauring tax rate for profits that have not been removed is also reduced from 28.25 percent to 25 percent.

In addition, the purchase of electric cars is favored for companies. In the year of acquisition, they can claim a depreciation of 75 percent. In the fifth year after the purchase, the depreciation is still two percent. Such measures are intended to promote environmentally friendly investments.

future tax reforms in the coalition agreement

But that's not all. The reforms are also part of a comprehensive coalition agreement between the CDU/CSU and SPD, which forms the basis for the new federal government. The draft of the coalition agreement was presented on April 9, 2025 after the exploratory talks were concluded on March 8. This contains important tax measures that should relieve the wide middle class, among other things.

The central points include a reform of income tax, which is intended to increase the commuter flat rate and reduce sales tax for food in the catering trade to seven percent. In addition, a tax relief of corporate investments is sought, which also includes the introduction of a degressive depreciation by 2027

With these colorful initiatives, the actors hope to strengthen the domestic economy sustainably. Chancellor Merz relies on quick decisions from the Bundestag and the Federal Council before the summer break is due. A good knack in these crucial questions could give the government a clear thrust that many companies urgently need.

The coming week could be crucial to bring the plans to dry cloths and to give the country a fresh air that is long overdue. It is to be hoped that the solutions that are on the table will also bring what they promise.