Tax increases endanger Bavaria's companies: Brossardt sounds the alarm!

Tax increases endanger Bavaria's companies: Brossardt sounds the alarm!

The vbw – Association of the Bavarian Economy e. V. has decided to take a stand against the planned increase in the “rich tax” and the inheritance tax. Managing Director Bertram Brossardt commented on the effects of these measures and described them as hindering the country's economic and social performance. According to Brossardt, such proposals could not only slow down investments, but also jeopardize company sales and weaken competitiveness. This view is supported by the fact that the top ten percent of taxpayers already bear more than half of the wage and income taxes.

The vbw believes additional tax burdens are not only unfair, but also harmful, especially for Bavaria as a business location and the creation and preservation of jobs. The discussion about tax increases is leading to increased uncertainty, which is endangering the positive mood in the economic sector. In Bavaria, around 35,000 company successions are imminent, which underlines the relevance of a sustainable tax regulation.

The risks of inheritance tax

Brossardt warns of an inheritance tax of 30 percent on business assets. Such a regulation could not only block investments, but also lead to companies being sold or locations being relocated abroad. In this context, the vbw sees the coalition agreement as investment and relief-oriented, but is calling for further measures to relieve the burden on companies.

With regard to business succession, the tax burden of inheritance and gift taxes highlights the importance of careful planning. Craft businesses in particular face the challenge of transferring their assets both during their lifetime and after death. However, German tax law offers benefits for the transfer of business assets, provided the business continues to operate and jobs are retained. Up to 85% of the business assets can be transferred tax-deferred.

Tax optimization strategies

The legal framework is determined by the Inheritance Tax and Gift Tax Act (ErbStG) and the Valuation Act (BewG). A detailed assessment of business assets is therefore essential in order to minimize tax burdens. This also includes the involvement of specialists, such as tax advisors, who provide support with strategic succession planning. Tax optimization can be done, among other things, by adapting the partnership agreement or choosing tax classes.

Tax allowances entitled to spouses €500,000, children €400,000, grandchildren €200,000 and siblings €20,000 are also relevant factors. The standard exemption allows a tax burden reduction of up to 85%, while the option exemption can offer up to 100% tax exemption if the payroll regulation is adhered to.

Overall, maintaining liquidity and healthy business succession planning are crucial to ensuring that the tax burden does not become a threat to companies. The vbw calls for the implementation of concrete relief and investment impulses in order to restore the growth path of the Bavarian business location. Further information and details on these topics can be found in the vbw press release as well as in the article on Inheritance and gift tax.