The Growth Opportunities Act (Wachstumschancengesetz) of 27.03.2024 introduces a number of important changes to German tax and investment policy in 2024-2025. It aims to ease the burden on companies and encourage innovation and investment. Thus, numerous changes are coming to the country, ranging from simplifying taxation to ensuring fairness in taxation mechanisms.
All these measures are aimed at strengthening the economy and making Germany more attractive as a business location through targeted incentives.
So which changes have already come into force, and which ones should be expected in the near future?
1.E-invoice
As it was
Invoices were issued in paper form or as electronic documents (pdf, scan copy)
What is going to change
Mandatory electronic invoicing in the B2B sector.
Date of entry into force
From 2025. Transition period until 2027
2. Increase in sales limit for actual taxation
As it was
Companies with a turnover of less than €600,000 per year were only entitled to pay sales tax when the payment is received into an account.
What is going to change
This limit is increased to €800,000 of turnover or €80,000 of profit.
Date of entry into force
2024
3. Increased limit for profit calculation with EÜR
As it was
Companies with a turnover of more than €600,000 or a profit of more than €60,000 had to switch to double-entry bookkeeping.
What is going to change
This limit is increased to €800,000 of turnover or €80,000 of profit.
Date of entry into force
2024
4. Changes in VAT reporting
As it was
Entrepreneurs whose total VAT for the previous year is less than €1,000 were exempted from filing preliminary VAT returns
What is going to change
This limit has been raised to 2,000 euros
Date of entry into force
2025
5. Degressive amortisation
As it was
Only straight-line amortisation was permitted.
What is going to change
If you acquire movable property for business between 1 April 2024 and 31 December 2024 in addition to straight-line depreciation you can choose the declining balance method.
Date of entry into force
2024
6. Increase in special and amortisation
As it was
Percentage of special amortisation 20%.
What is going to change
The percentage of special depreciation will increase to 40%. This helps to offset the cost of equipment, reducing the tax burden.
Date of entry into force
2024
Introduction of investment premium
The new law is also intended to support companies investing in energy efficiency. The investment premium is 15 per cent of the acquisition or production cost, which can be a maximum of €200 million during the financing period. Investments are accepted from a base amount of €5,000 and the premium is available upon application if the assessment base is at least €10,000.
The subsidy is exclusively for taxpayers from the following sectors:
- agriculture and forestry;
- commercial enterprises and self-employed who are not exempted.
The funding period runs from 1 March 2024 to the end of 2029, and the investment must be commenced and substantially completed during this period. A maximum of four applications per company can be submitted during the funding period.
Staff recruitment is another way to optimize company costs.
