For companies currently investing, depreciation on investments of 30% over three years leads to a noticeable tax relief. Service sector companies, which do not invest much in tangible assets, gain nothing from this and are still waiting for tax relief.

Depreciation is indeed attractive for parts of the domestic economy. However, internationally, the rates are not perceived as substantial. Thus, they are not really an argument for investing in Germany unless, as in the first term of Donald Trump's presidency in the US, there is 100% depreciation. The planned 30% does not have a wow factor. At the same time, the signal is: we still cannot manage to reduce the tax rate.

All companies would benefit from a reduction in the tax rate. The coalition wants to reduce the corporate tax rate from 2028 in steps of one percentage point per year. This is almost counterproductive. The next federal election will already be in 2029.

On the contrary, it is rather a devastating signal. A foreign investor looks at the tax rate and sees: everything stays the same. Nothing is changing in Germany. Moreover, such a hesitant tax rate reduction also costs money without really achieving anything.

Nothing. There is nothing about loss compensation, nothing about group taxation, nothing about restructuring, really nothing. That is frustrating. Instead, the increase in the minimum trade tax multiplier has been announced.

There are still companies playing the municipal trade tax competition game. For them, it will become a little more expensive. But these are absolutely not measures worth mentioning.

There is a cryptic formulation saying that they want to examine the possibility of subjecting commercial profits to corporate tax regardless of the legal form. This sounds like the old idea of a general corporate tax. But anything that could have become more concrete remains vague, or there’s simply nothing. I can hardly find anything positive in this, except for the depreciation. I don’t want to downplay that.

Companies are currently really under pressure, and the risk of loss is rising. The municipal cross-subsidy, a loss compensation among often poorly managed municipal companies, is addressed in the coalition agreement. But there is no thought about the losses of regular economic companies. That’s simply frustrating. The coalition agreement starts by stating that we need to create growth. Growth is created by risk-taking companies. Risk-taking companies often incur losses, especially in the initial phase.

We have various peculiarities in German corporate taxation that are standing in our way. One of them is the special role of the trade tax. In many municipalities, it is higher than the corporate tax. No other country has such a tax structure with two equally high, but differently calculated corporate taxes, and this always causes friction. Internationally, we always think of the corporate tax. The trade tax is special. In summary, we cannot properly credit foreign taxes. This is only possible with the corporate tax, not with the trade tax.

One of the central proposals of the commission was to make the corporate tax the leading tax again and to credit the trade tax against the corporate tax. This has already been done for the income tax since 2001.

Systematically, it is not a great solution to levy a tax and then credit it directly again, but unfortunately, we will not get rid of the trade tax, and at least we would have a meaningful corporate tax again. The corporate tax rate could rise to 25%, but the overall tax burden for corporations would decrease by five percentage points from the current 30%. For large cities with a trade tax multiplier of 450 to 500 points, the tax burden is currently around 32% to 33%.

The crediting is fiscally more advantageous than a corporate tax rate reduction. A reduction in the corporate tax rate, for example from 15% to 10%, would result in around 3 billion euros in lost revenue per percentage point. If, however, the corporate tax rate is raised but the trade tax is credited up to 400 points, one could think: if it leads to the same relief, it should also cost the same. But it doesn’t for a very simple reason. For municipalities, it is no longer attractive to keep their tax multipliers below 400 points.

If municipalities increase their tax multipliers from under 400 points, companies in municipalities with a multiplier of 250 points, like in Leverkusen or Monheim, will be slightly more burdened. Similarly, real estate companies, which currently benefit from the so-called extended reduction, will face higher taxes.

Real estate companies only have a tax rate of 15%. Even though the real estate sector doesn’t want to hear this: the regulation for the extended reduction is completely outdated. It refers to a time when the corporate tax rate was 56% and much higher than the trade tax rate. Today, we need to consider both corporate tax and trade tax together. Benefiting just one sector with only 15% is truly problematic and causes high complexity.

It is a positive point. The coalition wants to make it easier for partnerships to opt for the corporate tax. But they don’t specify how they plan to achieve it.

There are two reasons why partnerships don’t opt for the corporate tax. A partnership with high profits likely already used the so-called accumulation reserve. At an income tax rate of nearly 30%, they can currently accumulate profits. If such a partnership wants to switch to the corporate tax, all reserves must be retroactively taxed at 25%. No company is going to do that.

... is the special business property. These are assets owned by the partners of the partnership, not by the company. It could be a business property. These assets would have to be transferred into the company in order to opt for the corporate tax in a tax-neutral way. The partner usually doesn’t want to do that. They want to keep their property.

Currently, the special business property is transferred to another company. But this often doesn’t work because the so-called general plan jurisprudence applies. Judges speak of a circumvention logic: the structure only circumvents the fact that the partner should have contributed the property to the company and disclosed the hidden reserves. The coalition likely wants to change that.

I’m bothered by the approach. You always have to structure things around it. This leads to the complexity of tax law. If it’s now allowed to structure around it, it’s a bit better for practice, but it leads to costs and economically senseless structures.

It can happen that the special business property is overlooked. If it’s not transferred, the option is no longer tax-neutral, and all hidden reserves must suddenly be taxed. The existing option will only work properly if all the obstacles are removed. This is not trivial.

The coalition agreement does not mention anything about reducing bureaucracy in corporate tax law. I also doubt that there will be a reduction in bureaucracy. There isn’t a single useful proposal in the agreement on how the coalition plans to simplify corporate tax law.

They are contradictory. I get the impression that the problem is recognized, but there’s no real plan. The US is not participating. Suspending the tax in Europe could be a response to the retaliatory measures threatened by Trump. In the EU, we are also told that we need to simplify. It’s also very unclear what will happen with the minimum tax.

The companies' behaviour is somewhat unclear. They generally reject the minimum tax, but somehow accept it after investing millions in implementation.

In general, it’s a tax that practically brings in no revenue. It’s grotesque that the minimum tax costs much more to implement than it brings in revenue. There’s something wrong with this. Even aside from the particularly high introduction costs: the minimum tax will always cost companies and the tax administration that controls it much more. It should only make other countries raise their taxes to 15%. If countries like the US don’t participate, the minimum tax won’t achieve this goal.

The coalition agreement does not provide anything specific on this. On the contrary, the longest continuous section addresses ongoing issues of tax evasion and avoidance. While no new concrete measures have been announced, I also haven't seen the word „trust“ in relation to taxpayers.

The Cum-Ex cases keep the distrust alive. However, it was a specific clientele that engaged in this. The majority of companies are compliant. Especially large companies are under close scrutiny. Taxes obviously play a role in decisions made by companies operating globally and facing different tax rates. There are also financing structures involved. But the tax burden we see from country-by-country reporting does not show that companies are avoiding German taxes on a large scale.