Tax relief for companies: The big boost for Berlin!

Tax relief for companies: The big boost for Berlin!

Berlin, Deutschland - The federal government plans to comprehensive tax reliefs and investment incentives that will be discussed in the Bundestag for the first time on June 4, 2025. The association of the corporate associations in Berlin Brandenburg (UVB) welcomes this initiative, which aim to help the economy from the current recession and to promote growth -effective investments. UVB general manager Alexander Schirp was optimistic about the new depreciation options that are to be provided for companies.

The draft law provides for special measures, including the introduction of special depreciation for electric vehicles and machines. The gradual reduction in corporation tax, which is expected to decrease from 15% to 10% by 2032 by 2032. Tax research funding is also to be increased and the gross list price limits for the company car taxation from 70,000 to EUR 100,000.

concrete measures and financial effects

The new regulations enable companies to deduct 75% of the costs for newly acquired electric cars in the year of the purchase. The depreciation applies to vehicles that are bought between July 2025 and December 2027. Payment of tax -proof income from the federal government is significant and could reach a total of almost 46 billion euros by 2029.

These measures were also mentioned as a "investment booster" in the coalition agreement. Finance Minister Lars Klingbeil from the SPD presents the draft law with the aim of strengthening Germany's competitiveness and making economic expectations more stable. Critics, especially the Greens parliamentary group, demand that a financial compensation for the municipalities are created in order to avoid negative effects on public offers such as swimming pools and schools.

background of the tax reform

Current corporate taxation in Germany is around 30 percent, which is above the OECD average of around 23 percent and the EU average of 21.1 percent. These high taxes and bureaucratic hurdles particularly burden start-ups and innovative medium-sized companies, which often migrate to countries with cheaper framework conditions.

Improving the framework conditions is urgently necessary to promote investments in digitization and future technologies. The last major tax reform in Germany has been back since 2008. Suggestions from the German Chamber of Commerce and Industry (DIHK) include a reduction in corporate tax to a maximum of 25 percent and immediate abolition of the solidarity surcharge.

The Bundestag will discuss the federal government's plans on Thursday, while the Federal Council must finally agree. These targeted changes could have significant effects on the economic landscape of Germany and offer new impulses for growth.