Germany unveils package of tax breaks, tax cuts to boost investment

The package comprises a hefty tax write-off on investments in machinery and other equipment over the next three years, followed by a gradual reduction of corporate tax rate from 15 per cent to 10 per cent between 2028 and 2032.

There will also be tax breaks over the next two-and-a-half years for companies that buy electric cars and initiatives to encourage research investment.

Chancellor Friedrich Merz's cabinet approved the package, pending approval by lawmakers, according to global newswires.

The country’s economy has shrunk in the last two years and is expected to stagnate this year.

The new package is separate from a €500-billion (~$570-billion) fund that the ruling party coalition pushed through parliament before it took office last month to attract investment to the country’s infrastructure over the next 12 years.

"We are providing the economy with urgently needed planning certainty and creating strong investment incentives," German finance minister Lars Klingbeil said.

Economy minister Katherina Reiche said there will be further measures to cut energy costs, reduce bureaucracy and speed planning and approval procedures.

Fibre2Fashion News Desk (DS)