Published by Global Banking & Finance Review®
Posted on June 2, 2025
2 min readLast updated: January 23, 2026
The German cabinet is set to approve a tax relief package to boost investment with super depreciations and corporate tax cuts.
BERLIN (Reuters) -The German cabinet wants to approve a first tax relief package to support companies on Wednesday, a spokesperson from the finance ministry said on Monday.
The aim is to boost investment with favourable depreciation options for companies, including "super depreciations" of 30% per year for three years, a move that typically delays taxes due on business profits.
Germany's anaemic economy could be facing a third consecutive year of contraction for the first time in post-war history and reviving the economy is one of the main tasks of the new government.
The first package also includes the promised reduction of corporate tax rate by one percentage point per year over five years beginning in 2028.
Additionally, to encourage purchases of electric cars, the package includes temporary tax deductions for buyers.
The spokesperson from the finance ministry said there are ongoing discussions on how to bring the draft law to parliament before the summer break.
Additional measures, such as the establishment of the 500 billion euro ($572.00 billion) infrastructure fund, should be brought to the cabinet together with the draft budget for 2025 on June 25 and the first draft for the 2026 budget on July 30.
($1 = 0.8741 euros)
(Reporting by Christian Kraemer, Holger Hansen and Andreas Rinke; writing by Maria MartinezEditing by Ludwig Burger)
The tax relief package aims to support companies by boosting investment through favorable depreciation options and reducing the corporate tax rate.
Key features include 'super depreciations' of 30% per year for three years and a reduction of the corporate tax rate by one percentage point annually over five years starting in 2028.
The package includes temporary tax deductions for buyers of electric cars to encourage their purchase.
Discussions are ongoing about bringing the draft law to parliament before the summer break.
Additional measures include the establishment of a 500 billion euro infrastructure fund, which will be presented alongside the draft budget for 2025.
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