Bundestag: How the federal government wants to make companies invest

The Bundestag today decides over billions in tax reliefs that are supposed to help the economy out of its crisis. Extended depreciation options for machines and electric vehicles should ensure that companies invest more again. The so -called growth booster should also secure jobs – however, it becomes expensive for the federal government.

For the black and red coalition, the cranking of the weak economy is still one of the most urgent topics. Germany threatens the third year in a row without economic growth.

Companies should be able to copy their expenses for machines and devices in the current and in the next two years degressively from the tax – with up to 30 percent. As a result, the accounting profit drops immediately after purchasing accounting and thus the tax burden. However, the effect is limited: initially the depreciation are higher, then they drop over the years.

When the so -called booster has expired, corporation tax should gradually decrease from 2028 – from the current 15 percent to 10 percent in 2032. The purchase of a pure electric car should also become more attractive for companies. If you buy a new company-based electric car, you should be able to write off 75 percent of the costs in the purchase year. Small companies such as craftsmen should also be able to afford e-cars and give the German auto industry a boost.

How does that help the companies?

According to experts, German companies do not invest too little in their future – more modern machines could help produce more and better. The degressive depreciation is now relieved, especially in the immediate phase after an investment. Companies have more money available faster.

The problem: The measure only works for companies that initially have enough money to buy machines and devices. In addition, many companies are hesitating to invest because of the volatile international situation and the erratic customs policy of US President Donald Trump – that should hardly change.

Many companies primarily rely on a lower corporation tax. This also promises more competitiveness for Germany, because so far, companies in Germany have been paying quite high taxes in international comparison.

Why did Zoff exist with the countries?

Tax cuts lead to fewer income in public households. The “growth booster” is about around 48 billion euros. They should originally be largely worn by countries and municipalities. More specifically, the municipalities threatened to loss of 13.5 billion euros, the countries of 16.6 billion, and the federal government was supposed to shoulder 18.3 billion euros.

The federal states therefore demanded financial compensation, especially for the sometimes highly indebted municipalities. They threatened to fail the package on July 11th in the Federal Council.

Which solution was found?

The federal government takes over the tax losses of the municipalities completely – for a limited time until 2029. Because the federal government is not allowed to simply transfer money to the federal states, this happens on the distribution of VAT income.

In order to relieve the countries, the federal government invests an additional eight billion euros in daycare centers, other educational institutions and modern hospitals between 2026 and 2029. This cushioned about half of the tax failures of the countries on a detour. It is now expected that the law also passed the Federal Council after the Bundestag without major problems in July.