WW+KN, a Baker Tilly Company, provides this summary of the key corporate tax measures enacted through Germany’s “Growth Booster” Act (Wachstumschancengesetz), which entered into force on 1 July 2025 following final approval by the Bundesrat on 11 July 2025.
1. Accelerated Depreciation for Moveable Assets
Pursuant to the revised § 7(2) EStG, businesses may apply declining-balance depreciation of up to 30% per year for moveable fixed assets acquired between 1 July 2025 and 31 December 2027. The maximum rate is capped at three times the applicable straight-line rate. This measure aims to support liquidity and incentivise investment in equipment and machinery.
2. Enhanced Depreciation for Electric Commercial Vehicles
A new § 7(2a) EStG introduces a fixed depreciation schedule for pure electric vehicles used in business operations and acquired within the same timeframe. The schedule allows:
- 75% depreciation in year 1
- 10% in year 2
- 5%, 5%, 3% and 2% in years 3 to 6 respectively
In addition, the threshold for the favourable 0.25% company car taxation rule (for private use of electric vehicles) is raised from €70,000 to €100,000 (gross list price).
3. Reduction of the Federal Corporate Tax Rate
Under Art. 23 KStG-E, the federal corporate income tax rate will be gradually reduced over five years, beginning in 2028:
- 2028: 14%
- 2029: 13%
- 2030: 12%
- 2031: 11%
- From 2032: 10%
Taking into account solidarity surcharge and municipal trade tax, the overall corporate tax burden in Germany will fall to approximately 25% by 2032, improving international competitiveness.
4. Expansion of R&D Tax Incentives
As of 1 January 2026, the maximum assessment base for the research allowance (Forschungszulage) under the Forschungszulagengesetz (FZulG) increases from €10 million to €12 million annually.
Other key enhancements include:
- A 20% flat-rate overhead for eligible internal research staff costs
- Increased standard hourly rates for internal R&D activities
- Validity until 31 December 2030
These measures are designed to support innovation and simplify the administrative handling of R&D funding.
Strategic Considerations
The Growth Booster package strengthens Germany’s tax framework by:
- Accelerating investment write-offs
- Facilitating the transition to electric mobility
- Reducing the long-term tax burden for corporations
- Enhancing incentives for in-house innovation
All measures are now legally binding. Transitional periods apply to ensure companies can align their investment planning accordingly.
WW+KN, a Baker Tilly Company supports clients in all aspects of applying the Growth Booster reforms, including:
- Eligibility analysis for accelerated and special depreciation
- Tax-optimised structuring of fleet investments
- Long-term tax modelling under the reduced corporate tax rate
- Implementation of the enhanced research allowance scheme
For further information or to discuss your specific situation, please contact office@wwkn.de.
