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Government plans tax booster: electric cars and companies benefit!
The federal government is planning a tax package to relieve the burden on companies, including subsidies for electric cars until 2027.
Government plans tax booster: electric cars and companies benefit!
On June 4, 2025, the federal government under Chancellor Friedrich Merz (CDU) announced a first tax package to relieve the burden on companies. These measures are part of a comprehensive plan to stimulate Germany's struggling economy. Federal Finance Minister Lars Klingbeil (SPD) is particularly focusing on subsidies for electric cars and a reduction in corporate tax. The draft law is to be discussed in the Bundestag before the summer break, which promises that the measures will be implemented quickly. Loud Mercury When purchasing electric cars, companies can deduct 75% of the purchase price from taxes in the year of purchase.
This attractive regulation applies to purchases made between July 2025 and December 2027. In subsequent years, further depreciation of 5% in the second year, 3% in the third year and 2% in the fourth year is planned. In addition, the tax attractiveness of electric cars as company cars should be increased. Klingbeil's tax package also includes the so-called investment booster, which allows special depreciation of 30% for investments until 2027.
Long-term tax cuts
A crucial part of the law revolves around the reduction in corporate tax, which is to be reduced from the current 15% to 10% in five steps. These measures are aimed at sustainably strengthening the economy. The Merz government plans to add up the expected tax cuts for the years 2025 to 2029. The numbers are impressive: 2.5 billion euros for 2025, 8.1 billion euros for 2026 and 11.3 billion euros for 2029. The BDEW Federal Association of the Energy and Water Industry is optimistic about these tax reliefs, while the Federal Association of German Industries e.V. (BDI) sees the reduction in corporate tax as delayed.
The measures should lead to relief totaling 17 billion euros by 2029. Significant relief of around 11.3 billion euros is expected for 2027. In order to advance the implementation of these plans, the approval of the Federal Council is required, as the tax losses are distributed across the federal, state and local governments. Despite the upcoming tax losses of an expected 630 million euros in 2025 and 4 billion euros in 2026, the government is hoping for increasing tax revenues as the economy recovers.
A step into the future
The introduction of these tax measures is an important step in the strategy of the new black-red federal government. Klingbeil also plans to make the research tax allowance more generous. These adjustments are intended not only to provide short-term relief for companies, but also to help set the German economy on a sustainable growth path. It is therefore clear that the current tax package takes into account both short- and long-term prospects for German industry and society.