The immediate tax program to strengthen Germany as a business location is on
Nov 4, 2025
Information on the new law for an immediate tax investment program to strengthen Germany as a business location, including a brief explanation of the most important changes and advantages. The law has been in force since July 19, 2025, and aims to promote investment and strengthen Germany's competitiveness as a business location.
Small and medium-sized enterprises are expected to benefit particularly from faster depreciation options, tax relief, and greater planning security.
The most important measures at a glance:
Declining balance depreciation (AfA) as an investment booster
Reintroduction and increase of declining balance depreciation for movable assets (e.g., machinery, vehicles, business equipment).
Depreciation rate: up to 30% per year (maximum three times the straight-line depreciation).
Applies to purchases/production between July 1, 2025, and December 31, 2027.
The aim is to provide rapid liquidity and improved financing options.
Super depreciation for electric vehicles:
New arithmetic declining balance depreciation for newly purchased electric vehicles.
Up to 75% of the acquisition costs can be depreciated in the first year.
Increased gross list price limit for company car taxation for electric vehicles: €100,000 in future (previously: €70,000).
Our tax advisors will be happy to answer any detailed questions you may have or discuss the individual implications for your company.
Strong investment incentives for fleet modernization.
Reduction in corporate income tax rate: From 2028, gradual reduction from the current 15% to 10% by 2032.
Provides long-term relief for corporations and creates more scope for investment.
Reduction in the retained earnings tax rate
For undistributed profits in partnerships: gradual reduction from 28.25% to 25% from 2032.
Rewards entrepreneurial reinvestment.
Expansion of the research allowance:
Improved tax incentives for research and development projects.
Particularly relevant for innovative companies and start-ups.
Highlights and special features:
The program brings immediate tax relief (e.g., higher depreciation in the year of investment) and long-term relief
through lower tax rates.
According to government figures, the measures are estimated to result in approximately €46 billion in tax revenue shortfalls by 2029 – this demonstrates the political relevance and scope of the program.
Efficient implementation through short-term entry into force and simple application procedures.
Recommendation
Review potential investments and, if necessary, bring forward planned purchases in order to take advantage of the program (in particular the 30% depreciation allowance).
Explore opportunities for digitalization, mobility, and innovation in a targeted manner.
Our tax advisors will be happy to answer any detailed questions or discuss the individual implications for your company.