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Investment boost: Coalition plans tax relief for companies!
Mundelsheim provides information about the coalition's planned tax relief and investment incentives to strengthen the economy.
Investment boost: Coalition plans tax relief for companies!
The federal government is planning urgently needed relief for the economy in order to improve the investment climate in Germany. As part of an upcoming coalition committee, the introduction of a so-called “investment booster” was discussed, which includes, among other things, declining depreciation for companies. This is intended to encourage companies to invest more in new systems, as many companies have so far been hesitant about investments.
The positive mood during the deliberations was highlighted by Friedrich Merz, a member of the central committee. The coalition committee, which consists of eleven members – ten men and one woman – will meet at least once a month in the future to discuss fundamental political issues. However, this has already triggered criticism of inadequate gender representation, which is increasingly seen as a problem in the political landscape.
Details on new tax policy regulations
With regard to corporate taxation, the coalition agreement between the CDU/CSU and SPD published in April 2025 stated that a tax reorganization is planned. This provides for corporate tax to be gradually reduced by one percentage point from January 1, 2028. Corporate tax is currently 15% and is expected to be reduced to 10% in the long term. It is controversial whether and how these planned tax cuts will find a majority in the Federal Council.
In addition, it is intended to introduce a declining balance depreciation rate of 30% on equipment investments for the years 2025 to 2027. This measure aims to improve the tax framework for companies in particular. The current regulation for declining balance depreciation expires at the end of 2024, which reinforces the need for rapid implementation.
Economic vision and challenges
The coalition agreement entitled “Responsibility for Germany” aims to secure a competitive and growing economy. To achieve this, extensive public investment in infrastructure, defense and security is planned. Particular emphasis is placed on the need to strengthen confidence in state capabilities in the face of global crises such as the COVID-19 pandemic, the energy price shock and the Ukraine conflict.
The plans also include carrying out structural reforms to accelerate economic growth and reduce bureaucracy. Measures to increase tax support for research and to improve the conditions for venture and growth capital are also part of the approach. In addition, a special fund worth 500 billion euros is to be set up to reduce investment backlogs.
The aim is also to reduce electricity prices in order to create a reliable framework for future investments. The planned future fund, which is to be increased to 10 billion euros by 2030, is another instrument to strengthen private growth financing and promote innovations in key technologies such as artificial intelligence and biotechnology. These comprehensive measures are intended not only to overcome the current economic challenges, but also to lay the foundations for future growth.
However, current uncertainties in world trade and tariff increases could continue to weigh on economic development, which is why careful implementation of the measures decided is necessary.