Federal Council approves Growth Opportunities Act

In its meeting on 22 March 2024, the Federal Council approved the "Act to Strengthen Growth Opportunities, Investment and Innovation as well as Tax Simplification and Fairness" (Growth Opportunities Act) in the version recommended by the Mediation Committee (BT Drs. 20/10410) on 21 February 2024.

The Act primarily bundles balance sheet tax measures to improve the liquidity situation of companies and to simplify the tax system and reduce bureaucracy for smaller companies.

The main contents of the law include

• the introduction of a declining balance depreciation allowance (AfA) for residential buildings of five per cent,
  
• the introduction of declining balance depreciation on movable assets for nine months,
  
• increasing the loss carryforward to 70 per cent (excluding trade tax) for a limited period of four years,
  
• the increase in the depreciation rate for special depreciation in accordance with Section 7g EstG to 40 per cent, and
  
• the expansion of tax incentives for research.

Further regulations concern the simplification and modernisation of tax law and the promotion of tax fairness.

The initially planned climate protection investment premium is no longer part of the Growth Opportunities Act.

The legislative process will not be finalised until the Act is published in the Federal Law Gazette.

The version of the Mediation Committee's recommended resolution BT Drs. 20/10410 can be found here.