Key Facts
• July 11, 2025: German upper house approved $54 billion corporate tax relief.
• Implementation period: 2025–2029, targeting economic recovery.
• First phase of tax relief already passed by the lower house.
• Measures include 30% annual depreciation for three years.
• Electric vehicle buyers can depreciate 75% of vehicle cost in the purchase year.
• Corporate tax rate to decrease by 1% annually from 2028 to 2032, reaching 10%.
• Finance Minister Klingbeil: “Strong investment incentives and job security will restore growth.”
• Cologne Institute for Economic Research predicts €29 billion GDP growth by 2029.
• Investment expected to rise by €16 billion, creating up to 39,000 jobs by 2029.
Summary
Germany’s upper house of parliament has approved a $54 billion corporate tax relief package aimed at revitalizing the country’s struggling economy. The measures, set to be implemented from 2025 to 2029, include significant tax incentives such as a 30% annual depreciation allowance and a 75% depreciation for electric vehicle purchases in the first year. Additionally, the corporate tax rate will gradually decrease by 1% annually from 2028, reaching 10% by 2032. Finance Minister Klingbeil emphasized the plan’s potential to boost investment and secure jobs, projecting a return to economic growth. The Cologne Institute for Economic Research estimates the measures will increase GDP by €29 billion and create up to 39,000 jobs by 2029. This initiative marks the first phase of Germany’s broader tax relief strategy.
