The federal government wants to attract specialists to Germany with tax advantages – because other countries have been doing this for a long time. But there is opposition. Even from the ranks of the traffic light coalition.
Federal Labor Minister Hubertus Heil is critical of the planned tax relief for foreign skilled workers. “This falls under the category of ‘we need to take a closer look at this’,” said the SPD politician on Deutschlandfunk. “I admit that I am not terribly happy about the agreement at this point because it could lead to misunderstandings.”
Federal Minister of Economics Robert Habeck (Greens) pointed out that a good double-digit number of European countries are already trying to attract foreign skilled workers to the country in the first few years by offering tax breaks. “We will also make this attempt,” explained the Green politician during his summer trip to Bonn. He had heard Heil’s statements. “The SPD will discuss this among themselves.”
Tax bonus is part of the planned growth initiative
The planned tax bonus can be found in the 31-page growth initiative that the coalition leaders decided on last week in connection with the compromise on the 2025 federal budget. The aim of the measures contained therein is to stimulate the ailing German economy again.
The paper states: “In order to make Germany more attractive for foreign skilled workers, the federal government will also introduce tax incentives for taking up work in Germany. To this end, newly immigrated skilled workers can exempt 30, 20 and 10 percent of their gross wages from tax in the first three years.” A lower and upper limit for the gross wage will be defined for this exemption.
Sharp criticism from the opposition
The chairman of the CSU regional group in the Bundestag, Alexander Dobrindt, was outraged: “This is a real program that discriminates against domestic residents that the traffic light coalition has come up with,” he told the German Press Agency. “How should we imagine this? In future, Austrians or Dutch people will pay less taxes than locals if they work in Germany?” BSW head Sahra Wagenknecht spoke in a similar way of a “policy against the country’s own population.” She told the dpa in Dresden: “The plans are a slap in the face for the average citizen who has always dutifully paid his taxes and duties here.”
Regulation should only apply to skilled workers
FDP parliamentary group leader Christian Dürr made it clear that the tax advantage should only apply to skilled workers and not to refugees, as Wagenknecht implied. The traffic light coalition has created a new immigration law with clear criteria and fast visa procedures. “Nevertheless, we remain a country with bureaucratic hurdles and high taxes. That is why it is completely right to offer tax incentives as a recruitment bonus for well-trained skilled workers,” Dürr told dpa.
However, Labor Minister Heil stressed that such incentives are not the decisive factor if Germany really wants to be attractive to skilled workers. “It’s more about whether we recruit, whether we point out the strengths of our country,” said the SPD politician. “It’s formulated a bit uncertainly in this paper,” Heil added during his summer tour in Sigmaringen. “If it had been up to me, it wouldn’t have been possible.”
Criticism also from the traffic light coalition
Critical voices were also heard from the traffic light parties SPD and Greens: “I completely understand if this irritates people,” said Saxony’s Social Minister Petra Köpping (SPD) to the “Tagesspiegel”. Green labor market politician Beate Müller-Gemmeke told the newspaper: “There is a good reason why there is a principle of equal treatment in our labor law.” In her view, this would not be guaranteed if certain groups had more money in their wallets through tax incentives for the same work.
Tax incentives have been an issue for years
In 2018, the German government had already named 15 EU countries with such tax advantages in response to a parliamentary question. However, the focus was on executives in companies and other highly qualified and well-paid immigrants. Higher tax rates than in their home country often deter such target groups from moving abroad. In the Netherlands, a similar regulation to that planned by the traffic light coalition has been in force since the beginning of the year.
Bernd Meurer, the president of the Federal Association of Private Providers of Social Services, told the Redaktionsnetzwerk Deutschland (RND): “We welcome all steps to motivate international workers to work in Germany.” Immigrant workers also face many additional costs during the arrival phase.
Source: Stern
I have been working in the news industry for over 6 years, first as a reporter and now as an editor. I have covered politics extensively, and my work has appeared in major newspapers and online news outlets around the world. In addition to my writing, I also contribute regularly to 24 Hours World.
