Federal Government: Cabinet is launching several tax cuts

They concern commuters, restaurateurs, volunteers and agriculture: the Federal Cabinet has launched a number of tax relief. It is about projects that CDU, CSU and SPD had agreed in their coalition agreement – and that will cost the federal government billions in the next year. Next, the Bundestag and partly also the Federal Council are on the move so that the relief is finally decided.

The decisions in detail:

With the commuter flat rate, workers can deduct their travel costs from the apartment to work – regardless of whether they ride by bike, train or car. It is currently 30 cents per kilometer for the first 20 kilometers. From the 21st kilometer you can start 38 cents. In the future, 38 cents should apply from the first kilometer.

Finance Minister Lars Klingbeil (SPD) emphasized that this creates more justice between town and country. According to his ministry, additional advertising costs could be applied annually with a way to work of ten kilometers and five-day week. With 20 kilometers, 352 euros would even come together. If you only have to travel five kilometers from the place of residence to the place of work, you have an increase of 88 euros. However, this only applies if you exceed the flat -rate amount of 1,230 euros with your advertising costs.

Many economists and the OECD industrialized countries criticize the subsidy as expensive and climate-damaging. According to the ministry calculation in 2026, the reform escaped tax revenues of around 1.1 billion, revenue of around 1.9 billion euros in 2027.

VAT for gastronomy

The sales tax for food in the catering trade is to be permanently reduced from the current 19 to 7 percent. This was already true during Corona pandemic, but was increased again at the beginning of 2024. As of January 1, 2026, the lower tax rate should now apply again.

In addition to restaurants and cafes, bakeries, butchers and the food retail, caterer and provider of daycare, school and hospital catering also benefit from this. Tax revenues of around 3.6 billion euros are avoided annually.

On the one hand, the goal is an economic support for the catering industry, which recently suffered from declining sales. The federal government also hopes for lower prices for citizens. But whether there are really price reductions in restaurants is open. According to the NGG union, customers cannot hope for sinking prices nationwide.

It is the first step to reverse a violent decision by the traffic light government: the tax capacity for the agrardiesel is to be fully reintroduced. Agriculture and forestry companies should be able to reimburse energy tax for diesel from 2026 at 21.48 cents per liter.

This should relieve the companies financially and at the same time give them planning security in a market that is characterized by considerable price fluctuations. According to the Ministry of Agriculture, the full tax rate for diesel fuel is currently 47.04 cents per liter. Minister Alois Rainer (CSU) spoke of a long overdue step. One of the largest wrong decisions by the traffic light government is corrected.

The former coalition of SPD, Greens and FDP had decided to gradually delete the subsidy to stuff a billion dollar gap in the household. There should be no longer any subsidies for quantities that are used in 2026. That had triggered violent peasant protests. Now it says in the black and red bill: “A leak of the regulation would increase energy prices for companies and thus worsen the framework conditions for investments.” The reintroduction costs the federal government around 430 million euros a year.

Exercise manager and volunteer

The tax flat rate for trainers is raised from 3,000 to 3,300 euros, the volunteers from 840 to 960 euros. So much should be taken through your commitment in the future without paying taxes. This applies, for example, coaches in sports clubs, choir director or volunteers.

“Millions of people in Germany are committed to volunteering. All of these are people who hold our society together who are there for others who tackle and help. We want to support this commitment more,” emphasized Klingbeil.

Liability risks for the volunteers are also to be reduced. They only have to replace damage if they have been deliberately or grossly negligent. So far, this has only been up to a remuneration of 840 euros – in the future the limit should be 3,300 euros. “Because if you give a club for many hours of his free time, you should be able to get a fair allowance – without standing with full liability in the event of a misfortune or accident,” said Justice Minister Stefanie Hubig (SPD).