Schmitt calls for immediate tax relief for companies in Germany

Schmitt calls for immediate tax relief for companies in Germany

Germany's economic stability is on the brink. On June 5, 2025, the Rhineland-Palatinate minister Schmitt demands immediate measures to strengthen the economy and promote new investments. In his opinion, he emphasizes that Germany needs competitive tax conditions from 2026 and not only from 2028. Companies require planning security, attractive framework conditions and real relief in order to be able to survive in international competition, said Schmitt. Fair conditions are particularly important for medium -sized and family -run companies.

Another important aspect is the planned tax investment foter continued program of the Federal Government, which, according to Schmitt, is supposed to have an immediate effect. The minister sees the gradual lowering of corporation tax from 2028 as too late for many companies. Quick measures such as the reduction of corporate tax rate and the thesauring tax rate are of crucial importance for the economic dynamics.

Investment foal program and tax adjustments

On June 3, 2025, the coalition factions brought the draft of a law for a tax investment foal program into the Bundestag. A day later, on June 4, 2025, the Federal Cabinet decided on a government draft with identical content. The aim of the initiative is to strengthen the business location of Germany through growth -effective investments and to achieve long -term relief effects. In addition to the reintroduction and increase in the degressive afa for movable assets of the fixed assets, a gradual reduction in corporation tax rate and a lowering of the thesauring tax rate are also planned.

The tax changes provide for a reduction in corporation tax rate from 15 % to 10 % to 2032, as well as an increase in the gross list price limit in the company car taxation of electric vehicles from EUR 70,000 to EUR 100,000. These measures should have a total of almost EUR 46 billion tax reductions in the assessment years 2025 to 2029. A hearing in the Finance Committee of the Bundestag is planned for June 23, 2025, followed by the first reading in the Bundestag on the same day.

background and challenges

Corporate taxation in Germany is around 30 percent, which is significantly above the OECD average of around 23 percent and the EU average of 21.1 percent. These high taxes and bureaucratic hurdles are strongly increasing companies, especially start-ups and innovative medium-sized companies. This makes it difficult for fresh capital generation and many companies shift their investments abroad to benefit from more attractive conditions. According to the German Chamber of Commerce and Industry (DIHK), the last major tax reform in Germany was already in 2008.

In order to cope with these challenges, the DIHK propose a maximum of 25 percent as well as the immediate abolition of the solidarity surcharge. In addition, the depreciation conditions should be improved or investment premiums should be introduced. Such measures could promote economic recovery, accelerate new capacities and create jobs, emphasizes the DIHK.

The coming weeks will be crucial to observe how political decision -makers react to the demands from the economy and whether they will choose the necessary relief and incentives to secure Germany's economic future.