Lars Klingbeil plans massive tax cuts: 17 billion euros by 2029!

Lars Klingbeil plans massive tax cuts: 17 billion euros by 2029!

Finance Minister Lars Klingbeil (SPD) is launching extensive tax cuts for companies that are to grow to a total of 17 billion euros by 2029. According to Welt , the measures are part of a new coalition contract that was decided on April 9, 2025 by the SPD and the Union. This contract, titled "Responsibility for Germany", includes several tax reforms that aim to promote the willingness to invest of companies.

The planned tax cuts include an investment booster with special depreciation of 30 percent, which should apply between June 30, 2025 and January 1, 2028. In addition, corporation tax will be gradually reduced from 15 percent to 10 percent by 2032 from January 1, 2028. The tax research allowance is also more attractive. The depreciation for electric cars is also particularly funded at 75 percent in the year of purchase.

Details of the tax reform

The tax reliefs have been distributed over a different years. In 2025, EUR 2.5 billion will be expected of tax relief, while 8.1 billion euros will be expected for 2026. By 2029, the annual tax losses are expected to increase to 11.3 billion euros. Tax revenues are decreasing in a period of time, which in 2025 is projected with a failure of 630 million euros and in 2026 of 4 billion euros. These tax failures are spread over the federal government, the states and municipalities, which raises questions about the effects on the effects on the finances of the individual federal states.

further tax measures

The reform also provides for several adjustments in other tax areas. The sales tax rate for food in the catering trade is to be permanently reduced to 7 percent from January 1, 2026. In addition, a special depreciation for electric vehicles is introduced, and the vehicle tax for electric cars is exposed to until 2035. For non -profit associations, the exemption limit for economic business is increased to 50,000 euros.

The tax relief and reforms are part of a comprehensive strategy to strengthen Germany's competitiveness in an international context. According to Haufe , measures against shearing seating in trade tax oases are also to be taken. Despite these ambitious plans, the solidarity surcharge remains unchanged, which is considered a lack of progress in some comments.

The planned measures experience different response in the political landscape. The Coalition contract also mentions the examination of a working day flat rate for advertising costs and the introduction of tax incentives for union members. Whether the reforms can actually be enforced as planned depends largely on the consent of the individual parties and the approval in the Federal Council.