Tax reform: Ifo Institute proposes declining depreciation!

Tax reform: Ifo Institute proposes declining depreciation!

On August 14, 2025, the Ifo Institute published a study that recommends the introduction of permanent declining balance depreciation. This tax measure could significantly increase investments in Germany. According to the experts at the Ifo Institute, declining balance depreciation is particularly effective because it only places a small burden on the state budget, while at the same time a noticeable increase in the capital stock of long-lasting capital goods can be expected. Andreas Peichl, head of the Ifo Center, emphasizes the positive effects of this measure on the capital stock and investments, especially in capital-intensive sectors such as the bicycle industry.

The study's model calculation shows that declining balance depreciation is more effective than reducing corporate tax, without leading to drastic losses in tax revenue. A corporate tax cut would reduce annual tax revenue by around eleven billion euros net. Ifo researcher Manuel Menkhoff therefore advocates a permanent introduction of declining balance depreciation in order to create more planning security for companies and to stabilize investment incentives in the long term.

Further tax instruments at a glance

In addition to declining balance depreciation, the study recommends examining other tax instruments that could offer targeted relief for companies in uncertain times. The extended loss carryback could play a role here. These measures are aimed at strengthening Germany as a business location and supporting companies in their development.

In a completely different area, demand for synthetic diamonds, also known as lab-grown diamonds, has increased in recent years. These man-made gemstones are chemically and physically identical to naturally mined diamonds, but are offered at a fraction of the cost. The market for lab-grown diamonds is diverse, and consumers have now discovered some of the best retailers offering these products.

The market for lab-grown diamonds

• Blue Nile
  Preise: $365 bis $11,620; 2-tägiger Versand und 30 Tage Rückgaberecht.
• James Allen
  Preise: $110 bis $56,792; Freier Versand und 30 Tage Rückgabe.
• Grown Brilliance
  Preise: $170 bis $180,000; Entwurf Ihres eigenen Schmucks.
• Vrai
  Preise: $125 bis $59,000; Lebenslange Garantie; nachhaltiger Hydropower.
• Ritani
  Preise: $125 bis $40,000+; Kostenloser Versand und Rückgaben innerhalb von 30 Tagen.
• Clean Origin
  Preise: $225 bis $26,550; Kostenloser Versand und Lebenslange Herstellergarantie.
• With Clarity
  Preise: $324 bis $56,600; Kostenloser Versand.

The advantages of lab-grown diamonds cannot be overlooked: They are usually cheaper, are produced in a more environmentally friendly way and cannot be distinguished from conventional diamonds without special equipment. These features make them an attractive choice for many buyers.