Tax revolution: 30% depreciation for companies and e-vehicles from July!

Tax revolution: 30% depreciation for companies and e-vehicles from July!

On June 4, 2025, the Federal Cabinet approved a key draft law for a tax investment package, which could come into force as early as July 1, 2025. The new regulations, which are aimed at companies, include, among other things, a declining depreciation rate of 30 percent as well as specific incentives for the purchase of electric vehicles. These are supplemented by an increase in the gross price limit for electric vehicles as company cars from 70,000 euros to 100,000 euros.

How Craft sheet reports, the new regulations are part of a larger plan that aims to stimulate growth and improve the framework conditions for companies. In particular, the introduction of declining balance depreciation for movable fixed assets should initially apply until the end of 2027. This tax model is often referred to as “turbo depreciation” and allows immediate tax deduction of 30% of the acquisition or production costs.

Depreciation for electric vehicles

A notable depreciation of 75 percent is planned for companies that purchase new electric cars between June 30, 2025 and January 1, 2028. The regulation also stipulates that the depreciation for these vehicles falls to 10% in the year after purchase, 5% in the following two years, 3% in the fourth year and 2% in the fifth year. The expansion of the research allowance, which will be increased from 10 million euros to 12 million euros from 2026 to 2030, is also part of the package.

The initial feedback on the cabinet's decisions is positive. Associations and companies welcome the tax relief, even if the German Association of Tax Consultants (DStV) is critical of the “limited stamp” regulation for declining balance depreciation.

Further tax measures

The coalition agreement of April 9, 2025 sets the tax policy direction of the new federal government. As part of this contract, the focus is on tax relief for companies and private individuals, the promotion of investments and the strengthening of local finances. Other goals include reducing bureaucracy and closing tax loopholes, such as Ecovis KSO reported.

In addition, the government plans to reduce the corporate tax rate by 1 percentage point annually starting in 2028 until a total reduction of 5 percentage points by 2032. There are also relief measures in the area of ​​income tax, especially for small and medium incomes. For example, the commuter allowance is to be increased to 38 cents from January 1, 2026.

The upcoming changes in corporate taxation and the new depreciation options are therefore not only welcome support for the economy, but also an indication of the federal government's long-term tax policy goals. Companies are encouraged to use the new regulations to promote investment and increase their competitiveness.