An attractive tax environment is a key factor in Germany’s success as a business location. This includes not only the tax burden, but also a modern, streamlined, and digitally compatible tax code that specifically promotes investment and employment in Germany.

In close coordination with its member associations, the BDI has identified tax regulations that, in practice, result in avoidable time, resource, and administrative burdens. These regulations must be swiftly revised and modernized in order to—following the Immediate Investment Program—provide a further tax policy stimulus for investment in Germany.

Targeted reduction of tax bureaucracy strengthens Germany as a business location

The BDI’s proposals are summarized in a recent position paper that clearly outlines the need for reform. The proposals take the current budgetary situation into account and do not seek revenue-reducing tax breaks, but rather focus on a targeted and necessary reduction of tax bureaucracy. In light of increasing international tax competition, the reduction of tax bureaucracy is a decisive locational advantage for Germany, benefiting both the human and financial resources of businesses and the public administration. Numerous BDI proposals also align with the recommendations of the “Simplified Corporate Tax” expert commission established by the Federal Ministry of Finance.

Comprehensive proposals covering all areas of national tax law

The BDI’s proposals include simplification measures for small and medium-sized enterprises and partnerships (e.g., regarding the retained earnings rule), streamlining of trade tax and the research allowance, optimizations for the parent companies of German corporate groups (e.g., through the introduction of modern group taxation), simplifications in international tax and procedural law (e.g., regarding withholding tax and transfer pricing documentation), as well as procedural improvements and digital advancements (e.g., regarding in-kind benefits, tax audits, and through a settlement model for import sales tax).

The BDI’s proposals are directed at the German legislature. The BDI addresses the necessary simplifications regarding the global minimum tax separately in a dedicated position paper, as well as through targeted activities at the EU and OECD levels. The BDI aims to introduce the proposals for reducing bureaucracy into the tax policy legislative process in a timely manner and, ideally, before the end of this year.