Investment booster: opportunities and challenges for Bavaria's companies!

Investment booster: opportunities and challenges for Bavaria's companies!

In the current economic situation, many companies are concerned about making new investments. However, Gerhard Mann, an entrepreneur from Landshut, has taken a different path: his company has invested five million euros in a new logistics center. Managing director Benedikt Forsthofer calls this decision a “bet on the future”. This illustrates the opposing reactions within the economy, which the Bavarian Chamber of Commerce and Industry assessed as rather pessimistic in its 2025 spring survey.

The construction industry and industry are reluctant, ultimately out of concern about high energy costs and bureaucracy. In response to this, the federal government, under the leadership of Federal Finance Minister Lars Klingbeil, launched the “Investment Booster”, which is intended as a measure to stimulate the economy. The plans stipulate that companies can take special depreciation of up to 30 percent on investments in machinery between 2025 and 2027.

Sustainable measures required

Despite this measure, there are critical voices about the planned tax relief. Ifo President Clemens Fuest described the investment booster as not very effective because it merely represents a shift in tax payments. Fuest calls for a comprehensive growth agenda to address the economy's pressing problems more effectively.

Bertram Brossardt from vbw also sees the special depreciation as a positive step, but remains skeptical and expresses the need for further measures. The Bavarian IHKs welcome the federal government's proposals, but at the same time call for the removal of bureaucratic hurdles. One example is the long waiting times for building permits - even for a five-meter-long advertising sign there is no clear time limit.

Other tax initiatives

The new government's coalition paper emphasizes the importance of growth and cohesion in budget and financial policy. The reduction in corporate tax is planned from January 1, 2028, planned in five steps of one percentage point each. In addition, the income tax for small and medium incomes as well as the relief amount for single parents are to be increased in order to improve the financial situation of single parents.

• Die Pendlerpauschale wird ab dem 01.01.2026 auf 38 Cent ab dem ersten Kilometer erhöht.
• Die Umsatzsteuer für Speisen in der Gastronomie wird ab dem 01.01.2026 auf 7% gesenkt.
• Eine Freigrenze für gemeinnützige Vereine wird auf 50.000 Euro erhöht.

These tax measures are part of a comprehensive plan that, among other things, aims to reduce transmission network fees and reduce electricity taxes to the European minimum. With regard to electric vehicles, a rebate for agricultural diesel will be reintroduced and the tax breaks for electric cars will remain in place until 2035.

The announcements and planned changes provide new incentives for companies to promote investment activities. The implementation of tax incentives and the reduction of bureaucracy will be crucial for stabilizing the economy. Nevertheless, politicians must address companies' concerns in order to ultimately strengthen trust in a sustainable growth policy.

While the economy teeters on the brink of uncertainty, it remains to be seen how the announced measures will be received in practice and whether they can actually have the desired effect. It is a crucial moment for companies that want to prepare for the wave of investments.

The following articles are available for further information: BR reports and IWW informed.