Online message – Monday, March 18, 2024
Legislation | Proposal for an agreement on the Growth Opportunities Act is up for vote (Federal Council)
At its next meeting on March 22, 2024, the Federal Council will discuss the agreement proposal of the Mediation Committee on the Growth Opportunities Act of January 21, 2024, which the Bundestag already approved on February 23, 2024.
background: The Growth Opportunities Act was passed by the Bundestag on November 17, 2023. Its aim is to strengthen the competitiveness of Germany as a business location with tax investment incentives. Among other things, it provided for the introduction of an investment bonus to promote the transformation of the economy. This bonus for energy efficiency measures was intended to improve local conditions with tax incentives for investments in clean and climate-friendly technologies. The Federal Council called the Mediation Committee on November 24th, 2023 and called for a fundamental revision of the law (see our online message dated November 24th, 2023).
The so-called spurious compromise from the Mediation Committee, which came about without the votes of the members of the CDU/CSU parliamentary group and is now submitted to the Bundesrat for approval, includes numerous changes to the law, including:
Introduction of a declining depreciation on wear and tear (Depreciation) for residential buildings of 5 percent,
Introduction of a degressive depreciation on movable assets for 9 months,
four-year increase in the loss carryforward to 70 percent (excluding trade tax) and,
Expansion of tax support for research.
In addition, the planned climate protection investment bonus should be deleted from the law.
Based on these proposed changes, the Growth Opportunities Act would result in relief of €3.2 billion.
Those: BundesratKOMPAKT, report from. March 15, 2024 (il)
Note from the online editor:
It is currently unclear whether the Federal Council will approve the law. Some countries are making their approval dependent on the planned withdrawal of the gradual abolition of tax refunds for agricultural diesel through the Second Budget Financing Act 2024, see the
Press release from the Bavarian State Ministry for Food, Agriculture, Forestry and Tourism v. March 17, 2024. However, there may still be signs of a compromise. According to press reports, compensation for the additional burden on agriculture caused by the abolition of subsidies for agricultural diesel is being negotiated. (il)
Location(s):
NWB MAAAJ-61780