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After a long struggle, the Growth Opportunities Act was confirmed by the Federal Council. This means that there are finally tax reliefs for companies and for some citizens.
Berlin – A protracted battle between the government and the opposition has once again been overcome: the Growth Opportunities Act, which was blocked in the Federal Council by the CDU and CSU to date, is now a done deal. The law is an important signal to the economy, although company representatives doubt that it will bring about a major turnaround. And tax relief was also decided for pensioners. Here’s the overview.
Tax relief is also planned for pensioners
After mediation between the Bundestag and the Bundesrat, the draft law provides for tax relief for companies worth 3.2 billion euros, primarily through additional depreciation options. These are particularly relevant for the beleaguered construction industry.
Originally, around seven billion euros were planned. Until recently, the Union had linked its approval to the project to a reversal of subsidy cuts in agriculture. Instead, the traffic light wants to accommodate the industry in other areas, through tax advantages, a greater reduction in bureaucracy and obligations for brownfields that are temporarily not allowed to be cultivated.
Some of the key reliefs in the law include:
- Tax depreciation options, especially for the construction industry
- Abolition of double taxation for pensioners
- Special tax treatment when purchasing e-cars
- Introduction of e-invoicing to stop tax fraud
- Adaptation and facilitation of the retention obligation and the accounting obligation
- Increase in research allowance
Housing construction should be stimulated
The so-called “degressive Afa” is particularly important for the construction industry. Afa stands for “depreciation for wear and tear”. With the degressive degressive depreciation (in contrast to the currently valid linear depreciation), the buyer of a newly completed property can write off a larger proportion of the investment amount for tax purposes over a longer period of time. This makes investing in real estate more attractive, at least that’s the idea.
Representatives of the construction industry also reacted with relief to the news of the decision. “It’s coming late, but it’s coming,” says the President of the Hessian construction industry, Thomas Reimann, to this editorial team. “Hopefully it will now be seen as an important signal in the construction industry to get housing construction going again to the necessary extent.” However, further steps are necessary.
This is also what representatives of other industries say the first steps towards tax relief and reduction in bureaucracy happy – but there still needs to be more. The managing director of law and taxes at the Chemical Industry Association, Berthold Welling, commented in a statement: “The Growth Opportunities Act only half-heartedly ends 15 years of standstill for more attractive tax conditions in Germany. The increase in the tax allowance for research is at least positive. This is at least a start.”
“Government must ignite the turbo”: Lindner promises even more
And the entrepreneur Peter F. Schmid, managing director of Visable, who is primarily committed to providing relief for small and medium-sized companies, also said in response Ippen.Media: “If SMEs are not relieved quickly through lower taxes and the reduction of bureaucracy, our prosperity will be in serious danger. The Growth Opportunities Act can only be a beginning.” There is a lot of potential, particularly in terms of digitalization, that Germany is not yet making enough use of, Schmid continued. “The government must finally turn on the turbo here, otherwise we will be left behind as a business location.”
Finance Minister Christian Lindner (FDP) has already promised further relief for the economy. The growth package passed in the Federal Council is an important signal, he explained on Friday on X (formerly Twitter) after the decision in the Federal Council. “But its volume is significantly smaller than I originally planned.” Further steps must now be taken to improve the economic situation. “We are working on it,” promised Lindner.
With material from dpa and Reuters