Legislative tax proposals of the ‘traffic light’ coalition
Changes related to businesses
- Review to determine if workable adjustments need to be made to the option model and the so-called taxation of retained profits (please note: our reports on the option model in this issue and in a previous article demonstrate that this is the case).
- Extension of the extended loss offset (€10m instead of € 1m) until the end of 2023 and spreading of the loss carry-back to the two immediately preceding tax assessment periods.
- ‘Super depreciation’ on investments in climate protection and digital capital assets that are made in 2022 and 2023.
- Initiatives aimed at introducing global minimum taxation and constant updating of the list of tax havens.
- Appropriate taxation of income flows out of Germany, while aiming to prevent both non-taxation as well as double taxation.
- Prevention of tax structures through the expansion of withholding tax rights, in particular, by making adjustments to double taxation agreements.
- Supplementing the ‘interest barrier’ by adding an ‘interest rate level barrier’.
- Implementation of the OECD anti-tax avoidance rules for the international exchange of information on financial accounts (CRS and FATCA) and the expansion of the exchange of information.
- Extension of the disclosure obligations for tax arrangements (DAC 6) to the national tax arrangements of businesses with revenues of more than € 10m.
- Modernisation and speeding up of tax audits, in particular, through improved interfaces, standardisation and the meaningful use of new technologies. Setting up a central organisational unit at the federal level to ensure that the tax administration is able to adapt to the digital transformation and to reduce tax bureaucracy.
- Promotion of employee share ownership by, among other things, further increasing the tax allowance.
- Tax incentives and investment allowances for producing affordable housing with social restrictions.
- Simplification of the process of making in-kind donations to non-profit organisations in order to prevent the destruction of such goods.
- Introduction of a nationwide electronic reporting system that will be used for the preparation, verification and forwarding of invoices (so-called e-invoicing). The aims in this respect are the prevention of fraud as well as the modernisation and de-bureaucratisation of the interface between the administration and businesses. At the EU level, the coalition wants to advocate for a definitive VAT system (e.g., reverse charge).
- Further development of the import sales tax in order to achieve a level playing field for European competitors.
- Strengthening of inclusion businesses by, among other things, formally enshrining tax privileges in VAT law.
- Implementation of the so-called plastic tax - allocation of the plastic charge to manufacturers and distributors.
Measures relating to all taxpayers
- Simplification of tax returns and digitalisation of the taxation procedure.
- Tax relief for plug-in hybrid vehicles to focus more strongly on the purely electric mileage. In future, hybrid vehicles would be tax privileged only if the vehicle is propelled predominantly (more than 50%) in pure electric drive mode.
- Extension and, where necessary, revision of the tax regulations for employees with respect to working from home up to 31.12.2022.
- Increase in the flat-rate saver’s allowance to € 1,000 or, in the case of a joint assessment, €2,000 as of 1.1.2023.
- Increase in the straight-line depreciation for new residential construction from 2% to 3%.
- Intensification of the fight against tax evasion and tax avoidance.
- Prevention of double taxation of pensions.
- Enabling the flexible structuring of real estate transfer tax at the level of the Länder [Federal States] in order to facilitate the purchase of owner-occupied housing.