Finance Senator Dr. Andreas Dressel: “The German economy had rightly urgently called for the law. After parts of the CDU gave up their irrelevant connection between the law and agricultural diesel, a majority was finally found in the Federal Council today. The law is now just about financially justifiable for states and municipalities and is much easier to implement than the first draft. The work in the mediation process, which I took part in for the states, was therefore worth it. What is particularly important for us in Hamburg is that the law also provides targeted incentives for housing construction through improved depreciation conditions. If so much money had not been spent on the Inflation Compensation Act in 2022 and 2023, especially on the top tax rate, the Growth Opportunities Act could have been larger. Now we are all called upon to implement this growth impulse in the best possible way. The economy and housing are waiting for it!”
In terms of content, the law is intended to provide impetus for more growth and investment by also improving the liquidity structure of companies. For example, declining balance depreciation for movable fixed assets will be reintroduced for a limited period of time. A declining balance of 5 percent depreciation is also planned for residential buildings. In addition, higher special depreciation is permitted within the scope of the investment deduction and – under certain conditions – special depreciation for new rental apartment construction. In addition, the loss carryforward will be increased to 70 percent (excluding trade tax) for a period of four years. Tax support for research is also being expanded. In general, the law is also intended to simplify and reduce bureaucracy, e.g. B. by increasing thresholds and flat rates. The financial impact of the law for the FHH remains considerable. In the 2024 annual budget alone there will be a shortfall in tax revenue of around 20 million euros, in the following years up to 2028 around 68 million, 87 million, 74 million and finally 49 million euros.
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