Agency Report –
The German parliament on Thursday approved tax relief measures worth billions of euros, aimed at pulling Europe’s largest economy out of crisis.
The measures include more options for businesses to account for the depreciation in the value of their machinery from July 1, in a move designed to encourage companies to increase investments.
“That is what this government has set out to do: To prioritize economic strength, growth and job security,” Finance Minister Lars Klingbeil told the Bundestag, the lower house of parliament.
Specifically, companies will be able to set their expenditure on machinery and equipment against tax by up to 30% for the next three years, and to a lesser extent in the following years.
This will reduce the tax burden after a purchase, leaving companies with more money available sooner. Once the so-called booster has expired, the corporate tax rate is set to gradually decrease from 2028, falling from the current 15% to 10% by 2032.
The purchase of a fully electric vehicle will become more attractive for companies from a tax perspective.
The cost of the package to the federal government, states and municipalities will be around €48 billion ($56.3 billion), with the federal government bearing the main burden.
The law still requires the formal approval of the Bundesrat, or upper house of parliament, due on July 11. They have already signalled their approval, however.
