Bundestag approves billions for corporate investments!

Bundestag approves billions for corporate investments!

Today, June 26, 2025, the Bundestag will make a significant decision that could have far-reaching effects on the German economy. The bill on extensive tax relief, which aims to encourage companies to invest more in modern technologies, is on the agenda. Loud courier This could be an “immediate investment program” intended to encourage companies to invest money in new machines and electric vehicles.

The planned measures include, among other things, an expanded depreciation option for machines used for operational purposes. From now on, companies can deduct expenses from their taxes on a degressive basis of up to 30 percent, not only in the current year, but also in the two following years. This is intended to create a real incentive to focus on the often necessary modernizations. However, this depreciation is temporary, meaning the benefits will diminish over time.

About corporate tax

Another exciting topic is the gradual reduction of corporate tax. From 2028, the tax rate will be reduced from the current 15 percent to 10 percent by 2032. This was decided as part of a coalition agreement between the Union and the SPD, which was passed on April 9, 2025. The aim is to achieve an improvement in the framework conditions for companies through the so-called “investment boost” in order to increase competitiveness Haufe reported.

There is also an attractive offer for the purchase of electric vehicles. Companies that purchase electric cars for business use can claim 75 percent of the costs for tax purposes in the first year of purchase. This not only ensures a faster switch to environmentally friendly vehicles, but also noticeably reduces operating costs.

Financial impact and public budgets

However, we must also be aware of the other side of the coin: the planned tax cuts will place a heavy burden on public budgets. According to estimates, the federal government will lose around 48 billion euros in tax revenue. Municipalities are particularly affected as they have to expect a decline of 13.5 billion euros. However, the federal government has promised to compensate for the municipalities' tax losses by distributing VAT revenue by 2029.

Between 2026 and 2029, an additional eight billion euros are to be invested in educational institutions and the healthcare system. This maintains municipal services of general interest and shows that despite the necessary tax relief, investments are also being made in social areas.

Strengths through research and development

The government also plans to expand the research allowance and make it more attractive. The assessment base for eligible expenses is increased and new overhead and operating costs are taken into account. These measures aim to promote the innovative strength of companies and further strengthen Germany as a location, as stated in the overview of the draft law KPMG can be seen.

Overall, it can be said that the Bundestag is putting together a very ambitious program with these legislative proposals. It remains to be seen whether the planned measures will actually have the desired effect and how companies will react to them. What is certain is that the coming months will be crucial for Germany's economic development.