The German Federal Council (Bundesrat) unanimously approved a growth stimulus package previously passed by the Bundestag on Friday. The legislation aims to incentivize new investments within the national economy.
A core element of the program allows companies to apply accelerated depreciation on machinery and equipment purchases. This provision enables a decreasing write-off rate of up to 30 percent over this year and the subsequent two years. The rationale is that the reduced tax burden following acquisitions will free up capital for further investments.
Following the expiration of a previous incentive program, the legislation outlines a phased reduction of the corporate tax rate. Starting in 2028, the rate will gradually decrease from the current 15 percent, aiming to reach 10 percent by 2032.
The stimulus package also introduces incentive measures to encourage the adoption of electric vehicles within businesses. It aims to make the acquisition of fully electric vehicles more financially appealing through accelerated depreciation. Companies will be able to write off 75 percent of the vehicle’s value in the year of purchase. The permissible price limit for eligible vehicles has also been raised from €75,000 to €100,000.
Further supporting innovation, the legislation expands the scope of the research grant program. Intended to spur investments in research and development, the upper limit for calculating the grant will be increased from €10 million to €12 million for the period from 2026 to 2030.