Bundestag approves investment booster: Germany on course for growth!

Bundestag approves investment booster: Germany on course for growth!

On June 5, 2025, the Bundestag debated a comprehensive law known as the “immediate tax investment program to strengthen Germany as a business location”. The coalition factions of the CDU/CSU and SPD presented the draft law in Bundestag document 21/323, while a proposal from Alliance 90/The Greens (21/356) was discussed at the same time. Both templates were handed over to the committees for further discussion, with the Finance Committee taking the lead.

Federal Finance Minister Lars Klingbeil (SPD) emphasized the need to create new jobs through targeted investments and get Germany back on track for growth. He pointed out that the planned tax measures should contribute to strengthening competitiveness. One of the key changes is the introduction of super depreciation of up to 30% per year for movable assets, which will apply from July 1, 2025.

Planned tax relief

The bill also provides for a gradual reduction in the corporate tax rate. From January 1, 2028, this is expected to fall from the current 15% to 10% by 2032. In addition, the tax rate for retained profits of partnerships will be reduced from 28.25% to 25%. Electromobility is also receiving special support, as the tax depreciation for electric vehicles is to be increased to 75% by 2027, while the assessment basis for the purchase will be increased to 100,000 euros.

The planned tax relief volume is estimated at a total of 2.5 billion euros for 2025, as well as 8.1 billion euros for 2026 and up to 12 billion euros for 2028. This funding is aimed at strengthening the innovative power in Germany and increasing support for research by increasing the assessment basis of the research allowance from 10 million euros to 12 million euros and including additional expenses.

Criticism and concerns

Despite the positive approaches, the draft law was also viewed critically. Christian Douglas from the AfD described the current economic situation as homemade. Dr. Mathias Middelberg from the CDU/CSU pointed out the existing economic standstill and called for urgent measures. Andreas Audretsch from the Greens also expressed concerns about possible tax losses for municipalities and states.

Another proposal from the Greens calls for the end of tax exemption for profits from the sale of rented properties after ten years of holding, which could generate potential tax revenue of up to six billion euros. In addition to these aspects, the party is pushing for the end of trade tax exemption for asset-managing corporations and measures against organized tax evasion.

The discussions in the Bundestag show the multitude of facets that the proposed tax changes entail. However, the goal remains clear: to promote the competitiveness and innovative strength of the German market and to bring new impetus to the economy through tax relief and investment incentives.

For further details on current developments you can access the reports

bundestag.de and bundesfinanzministerium.de see.