Employers association faults tax breaks for foreign skilled workers

Admin I Wednesday, July 24, 2024

 

BERLIN – The head of Germany’s employers’ association said that it is not convinced by the German government’s proposal for tax breaks for foreign skilled workers.

“The proposal contradicts the principle of tax fairness and sends the wrong domestic political signal,” Rainer Dulger told dpa.

The proposal to give tax breaks to foreign skilled workers who move to Germany is part of a 31-page initiative being put forward by Germany’s centre-left coalition government aimed at boosting economic growth in the country and addressing chronic shortages of skilled workers by attracting immigrants.

“It is also likely to cause unrest in many workplaces,” Dulger said.

He suggested that broader tax benefits for all employees could also make Germany more appealing to foreign skilled workers.

The paper outlining the proposal calls for allowing “newly arrived skilled workers” to exempt “30%, 20% and 10% of their gross salary from tax in the first three years.”

A lower and upper limit for the gross wage is to be defined for the tax exemption.

German Finance Minister Christian Lindner of the pro-business Free Democrats (FDP) has said that the tax breaks should apply to “top executives” from abroad who could receive a tax “recruitment bonus.”

At the same time, Lindner said that the government had noticed that the proposal had been received with caution by employers.

“That is why we will first seek dialogue. We will not introduce anything that is not actively used by employers,” Lindner said. The trade sector had already expressed criticism of the planned tax incentives.