New Federal Government: Tax Policy for the First 100 Days
The tax framework is a key location factor for companies in Germany. Fortunately, the coalition agreement between the CDU/CSU and the SPD addresses several tax policy demands from the German business community: Heavily accelerated depreciation as an “investment booster,” a gradual reduction in the corporate income tax rate by five percentage points, the expansion of the research tax credit, and improvements to the taxation of partnerships.
The tax burden on businesses must be reduced to a maximum of 25 percent to restore the country’s competitiveness—however, the five-percentage-point reduction in corporate income tax should take effect immediately, not just starting in 2028.
Tax relief must take effect quickly
The new federal government is expected to implement the agreed-upon tax policy measures swiftly. The 30 percent accelerated depreciation for capital investments for the years 2025 through 2027 and the expansion of the research tax credit should be part of a 100-day agenda. The reduction in corporate income tax should also be enacted into law promptly—even if the coalition agreement does not provide for the first phase of relief until 2028. An early resolution would at least provide companies with planning certainty. The coalition agreement therefore rightly provides for bundling both measures into a single legislative process.
Implement Positive Tax Policy Initiatives Swiftly
The coalition agreement makes welcome statements of principle on numerous tax policy issues—such as improving the option model and the retained earnings tax break for partnerships, as well as reducing tax bureaucracy through “standardization, simplification, and flat-rate provisions.” Another positive development is the goal of preventing German companies from being disadvantaged in international competition by the global minimum tax—which the coalition intends to uphold. The planned transition of the import sales tax to a credit model is another encouraging aspect.
However, it is crucial that these measures not be put on the back burner but rather implemented swiftly. Concrete proposals from the business community and academia—most recently also from the two independent expert commissions of the Federal Ministry of Finance—have long been on the table. Now it comes down to political resolve. The federal states also bear responsibility in the Bundesrat, especially since the coalition does not have a majority there.
BDI Offers Constructive Cooperation with the Federal Government
The BDI will engage constructively and actively in the upcoming legislative processes—particularly with regard to reducing tax bureaucracy and further developing digital and AI-supported tax procedures. Numerous concrete BDI proposals, closely aligned with business practices, are ready for implementation:
Benjamin Koller
