Germany: Draft tax reform bill

The Federal Ministry of Finance (BMF) published a ministerial draft tax reform bill.

The Federal Ministry of Finance (BMF) published a ministerial draft tax reform bill.

The Federal Ministry of Finance (BMF) on 17 July 2023 published a ministerial draft tax reform bill entitled "Act to strengthen growth opportunities, investment and innovation as well as tax simplification and tax fairness."

The aim of the draft bill is to increase growth opportunities for the economy, to enable investment and innovation in new technologies, and to strengthen the competitiveness of Germany as a business location. To that end, the draft bill includes provisions that would:

  • Improve the liquidity situation of companies and provide enhanced investment incentives (e.g., better use of tax losses, investment premium for climate protection measures, expansion of research and development (R&D) allowance, improvement of depreciation)
  • Simplify the tax system and relieve small businesses of bureaucracy by raising thresholds and lump sums (e.g., simplification of the reporting procedure for cash register systems, simplification of wage tax, raising the limits for the obligation to keep accounts and for the actual taxation for value added tax (VAT) purposes)
  • Prevent unwanted tax arrangements (e.g., reform of the interest limitation rule and introduction of an interest rate barrier, reporting obligation for domestic tax arrangements, prevention of tax arrangements for investment funds) 

Next steps

The publication of the ministerial draft bill is the first step in the legislative process. Only after a government draft bill has been introduced into the parliamentary procedure will the Bundesrat have the opportunity to comment on the bill. This is followed by the resolutions of the Bundestag and the Bundesrat. In the course of the legislative procedure significant changes can still be made in the course of the legislative process.

The legislative procedure can still be completed in the current year. The law should generally enter into force on the day after promulgation.

Read a July 2023 report [PDF 299 KB] prepared by the KPMG member firm in Germany

Read an August/September 2023 report [PDF 455 KB] prepared by the KPMG member firm in Germany


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