On July 11, 2025, the Federal Council approved the law for an immediate tax investment program - an important step towards strengthening Germany as a business location. The program is intended to provide targeted investment incentives, give companies more planning security and secure jobs.

According to the Federal Ministry of Finance, the measures should lead to tax relief of around 46 billion euros between 2025 and 2029.

The adopted program at a glance:

✅ Reintroduction of declining balance depreciation:
From July 1, 2025 until the end of 2027, movable fixed assets can again be depreciated using the declining balance method - at up to % per year.

✅ Reduction in corporation tax:
From January 1, 2028 to December 31, 2032, the corporation tax rate will be reduced in five stages from 15 % to 10 %. This means a significant reduction in the corporate tax burden, as from 2032 the total tax burden will only be around % instead of the current rate of around %.

✅ Reduction of the retention tax rate:
For undrawn profits of partnerships, the rate will gradually fall to 25 % from 2032.

✅ Promotion of company climate-friendly mobility:
Introduction of arithmetic declining balance depreciation for newly purchased electric vehicles - up to 75 % in the investment year. This regulation is to apply to e-cars that are newly purchased between June 30, 2025 and December 31, 2027. 

✅ Increase in the gross list price limit:
The limit for the tax-privileged company car regulation for pure e-vehicles increases from 70,000.00 euros to 100,000.00 euros gross list price.

✅ More funding for research:
To boost investment in research, the maximum assessment basis for the research allowance will also increase from the previous EUR 10 million to EUR 12 million. From January 1, 2026, additional overheads and operating costs within the scope of new research and development projects will also be eligible for funding.

Source: Federal government,
www.bundesregierung.de/breg-de/aktuelles/wachstumsbooster-2351752

When will the fiscal investment program come into force?

The Federal Council has approved the law. It can now be executed and promulgated. For the most part, it will come into force the day after promulgation. The amendment to the Research Allowances Act will take effect on January 1, 2026.

Our WSB conclusion:

The immediate investment programme offers attractive tax levers, especially for companies that want to modernize, invest or promote climate-friendly mobility.

👉 Talk to us - we will be happy to advise you on how you can make the most of the new opportunities for your company:
www.wsb-berater.com/kontakt

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