Emmanuel Thomas, DPA, Thursday, July 13, 2023
BERLIN – German Finance Minister Christian Lindner has put forward a proposed tax package aimed at boosting business investment that would include estimated total tax breaks of about €6 billion ($6.6 billion) per year.
The tax proposals are designed to strengthen Germany’s business competitiveness and draw more investment, the Ministry of Finance said on Wednesday. The Frankfurter Allgemeine newspaper had earlier reported details of the package.
Lindner is proposing almost 50 different tax policy changes. The core element is a new subsidy for climate-friendly investments which was already included in a previous agreement by Germany’s three-party governing coalition. Lindner is the leader of the junior partner, the free-market liberal Free Democratic Party (FDP).
Companies that invest in energy and resource efficiency would be eligible for rebates of 15% of their investments through 2027, regardless of profits. Individual subsidies would be capped at a maximum of €30 million.
A further expansion of the subsidies is also being considered, according to the Ministry of Finance. The proposals also include more generous tax write-offs for research funding and business losses.
Lindner is also proposing extending the window for so-called loss carry-backs that allow prior-year profits to be offset by later losses. Carry-backs would be allowed to offset profits from the past three years instead of only the prior year.
The tax proposals must be voted on by the governing coalition and then the Cabinet before the package can be put before Germany’s parliament for consideration.
