Federal government puts together huge tax package for companies!

Federal government puts together huge tax package for companies!

On June 4, 2025, the federal government approved a significant tax relief package for companies that is intended to make a decisive contribution to stabilizing the economy. This billion-dollar package, which was initiated by Finance Minister Lars Klingbeil (SPD), aims to create incentives for investments. The planned measures are part of a comprehensive bill to stimulate the economy and combat the recession, as [tagesschau.de] reports.

At the core of the tax package are expanded depreciation options for machines and electric vehicles. These are intended to act as “investment boosters” and contribute to long-term stabilization of economic expectations in the coming years. This will enable companies to recoup their investments more quickly, which should improve Germany's competitiveness.

Details about tax relief

A central element of the package is the so-called super depreciation, which applies from 2025 to 2027. They allow special depreciation for movable assets, such as machines, of up to 30 percent. For newly purchased electric vehicles, 75 percent of the purchase costs are deductible in the year of purchase. Further deductions in subsequent years are also possible, with the regulations applying to vehicles purchased between July 2025 and December 2027.

The planned gradual reduction in corporate tax from the current 15 percent to 10 percent by 2032 is intended to offer companies long-term planning security. The draft stipulates that corporate tax will fall from 2028. In addition, the retention tax rate for undistributed profits will also be reduced, which should create further incentives for companies.

Financial impact and reduced tax revenue

The tax package will apparently also have a significant impact on the shortfall in tax revenue. In 2025, relief for companies is expected to amount to 2.5 billion euros, which will rise to 8.1 billion euros in 2026. A total relief of 11.3 billion euros should be achieved by 2029. In the first few years, the state will have to record significantly less revenue as a result of the package: 630 million euros in 2025, 4 billion euros in 2026 and up to 17 billion euros in 2029, as [stern.de] reports.

Following the cabinet decision, the Bundestag is now required to discuss the package and make a decision. A final decision should be sought before the summer break begins in mid-July. With these comprehensive measures, the federal government wants to promote economic stability and strengthen Germany as a location in the long term.