Turbo for investments
Immediate investment program: Tax incentives for Germany as a business location
On June 4, 2025, the Federal Cabinet approved the draft for a comprehensive immediate investment program. The aim: to strengthen Germany as a business location from a tax perspective, promote innovation and ease the burden on companies undergoing transformation. The Bundestag dealt with the bill in its first reading just one day later. The draft contains a number of highly attractive innovations for entrepreneurs, investors and tax consultants.
Degressive depreciation returns – the “investment booster”
At the heart of the law is the option of declining balance depreciation (AfA) for movable fixed assets acquired or manufactured between July 1, 2025 and December 31, 2027. Instead of straight-line depreciation, companies will in future be able to claim up to 30% annually, up to a maximum of three times the straight-line rate. This regulation is intended to bring forward investments and create liquidity effects.
Turbo depreciation for electric vehicles
A particular highlight is the special regulation for electric vehicles in business fixed assets: companies can write off 75% of the acquisition costs in the first year. In subsequent years, depreciation is 10%, 5% and 5% – provided that no special depreciation is claimed. A strong tax incentive for electromobility.
Corporation tax to be gradually reduced
In order to remain internationally competitive, the corporate tax rate is to be gradually reduced to 10% from 2028:
- 2028: 14 %
- 2029: 13 %
- 2030: 12 %
- 2031: 11 %
- from 2032: 10 %
At the same time, the tax rate on retained earnings (Section 34a EStG) will be adjusted from the current 28.25 % to 25 % by 2032.
Research allowance: more funding, less bureaucracy
Innovative companies will benefit in particular: the research allowance will be extended from 2026. The assessment limit will rise to 12 million euros, eligible projects will be expanded and flat-rate deductions will be introduced to make the process more practical. This will not only make research more attractive from a tax perspective, but also simpler.
Conclusion: prepare strategically now
The immediate investment programme brings considerable tax benefits for investments, digitalization, innovation and sustainable mobility.
Note: The law is currently in the parliamentary process. Changes to the details are possible, but the direction is clear: tax incentives for growth, progress and competitiveness.
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