“Economy has been waiting for tax policy signals from the federal government since the beginning of the energy crisis,” says BDI General Manager Tanja Gönner. “Targeted measures in tax policy are key levers to secure liquidity, jobs and investments in Germany, a high-tax country.”
Gönner has been in office since mid-November, and the tax policy demands are her first serve in politics. Striking: The paper does not begin with the well-known calls for a reduction in corporate taxes.
In any case, these can hardly be enforced in the traffic light coalition. Instead, the BDI is concentrating on measures that could help companies through the crisis and promote investment.
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This approach is more likely to fall on open ears in traffic lights. In any case, the financial policy spokesman for the FDP, Markus Herbrand, wants to support this: “The gloomy economic forecasts for the coming year make it urgently necessary to initiate sensible and targeted support to strengthen the German economy.” The most important proposals of the BDI:
The BDI proposes introducing an investment premium for digitization and climate protection. This should “be paid directly to the companies and immediately reduce the acquisition costs of the eligible assets,” says the paper.
With the demand, the association reminds the traffic light of a project from the coalition agreement. “We want to create an investment premium for climate protection and digital economic goods,” the SPD, Greens and FDP had agreed.
These “super write-offs” were supposed to apply to 2022 and 2023, but were then postponed indefinitely by Finance Minister Christian Lindner (FDP). Reason at the time: The order books of the companies were full anyway, the problem was more of a disrupted supply chain.
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From the point of view of the BDI, that has long since changed. “Inflation, high energy prices and supply chain difficulties are putting German companies under massive pressure,” says CEO Gönner. “The traffic light government should already create incentives for investments to strengthen and recover the location.”
One reason why Lindner and Die Ampel are struggling with the implementation of the super write-offs is the problem of delimitation: Exactly which acquisitions advance digitization and climate protection in a company – and which do not? “The legislature must now clearly define and delimit the eligible assets and set up a procedure that is as unbureaucratic as possible,” says the BDI.
FDP financial expert Herbrand still has the project on the implementation list: “With the super write-off that was already agreed in the coalition agreement but has not yet been launched in the course of the upheavals in 2022, we can set further incentives for sustainable and future-oriented investments,” says he.
In return, Lindner retained the short-term depreciation rules, called degressive depreciation, also in 2022. In this way, companies can claim the costs of investments more directly for tax purposes. The BDI is now calling for this regulation to be extended beyond 2022. “This enables unbureaucratic support for the economy in its digital and ecological transformation process for long-term, necessary investments.”
For years, the German economy had fought for tax incentives for research. It was not introduced until 2020, when the Minister of Finance was today’s Chancellor Olaf Scholz (SPD). However, the joy of the business associations was short-lived, as they believe the rules are not generous enough.
The federal government should “improve and expand”, it says in the paper. In an international comparison, especially with neighboring countries, the current research allowance is “not competitive”.
With the allowance, companies can claim the expenses for certain research projects. The allowance is usually not paid out, but the tax payments of the companies are reduced accordingly.
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However, there are limits to what expenses can be counted. According to the BDI, these should be raised so that the support can amount to at least two million euros. So far it’s one million euros.
The BDI proposes introducing an inflation or energy reserve. Companies should be able to park part of their profits tax-free in a reserve. This could increase their liquidity and thus better prepare them for crises.
For companies that are dependent on critical raw materials, stockpiling should be favored. “Warehousing is more necessary than ever due to stagnant or broken supply chains, but it ties up a lot of liquid funds,” says the BDI paper.
The top priority must be simpler corporate tax law and reduced bureaucracy for companies. BDI General Manager Tanja Gönner
If a reduction in corporate tax rates is not possible, the economy should at least reduce the amount of bureaucracy. “The top priority must be simpler corporate tax law and reduced bureaucracy for companies,” said Gönner.
As an example, she cites the introduction of the global minimum tax, which burdens companies with 300 million euros in bureaucracy costs. This urgently needs to be simplified.
Digital control methods
In principle, the BDI wants completely digital control processes. “A purely digital, machine-readable procedure must be created for all types of tax, so that paper receipts and notifications can be dispensed with,” the paper says.
The industry association shares this wish with the Federal Minister of Finance. “My vision is a largely digitized tax return,” explained Lindner on Twitter on Thursday.
There should also be agreement with Lindner on the “long-term perspective”, which the BDI describes at the very end of the paper. “In the long term” the reduction of the tax burden to “an internationally customary level” is necessary, it says there. The wording makes it clear that the BDI does not expect the current traffic light coalition to implement it either.
But at least the government should not follow the recommendation of the economic experts in the opinion of the BDI. Tax increases or energy solos are “counterproductive and jeopardize the necessary strengthening and recovery of the economy,” the paper concludes.
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