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Germany: Legislation aimed at stimulating investment passed by lower house of Parliament

Measures include gradual reduction in corporate tax rate

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June 26, 2025

The lower house of Parliament (Bundestag) on June 26, 2024, passed the "Act for an immediate tax investment program to strengthen Germany's business location" (with only minor changes on the research allowance). The decision of the Bundesrat is scheduled for July 11, 2025.

The bill includes the following measures, all of which are contained in the coalition agreement of the new federal government (read TaxNewsFlash):

  • Temporary reintroduction and increase of declining balance depreciation for investments in movable assets
  • Gradual reduction of the corporate tax rate and the retained earnings tax rate starting from 2028
  • Expansion of the research allowance

Read a June 2025 report prepared by the KPMG member firm in Germany
 

For more information, contact a KPMG tax professional:

Maximilian Hummel | mhummel1@kpmg.com

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