The German government is pursuing a plan to reduce the tax burden on companies by approximately 70 trillion won by 2029 as a measure to stimulate the economy.
On June 4 (local time), the German federal government approved a tax cut package bill in a cabinet meeting that includes reducing taxes on facility investments and electric vehicle purchases until the end of December 2027.
Starting July 1, the government will allow corporations to deduct 30% of their machinery, building, and technology investment costs annually for three years, and 75% of their electric vehicle purchase costs in the first year from their taxes.
After these tax benefits end in 2028, the government plans to lower the current corporate tax rate of 15% by 1 percentage point each year, down to 10%.
The German government prepared this tax reform plan to boost investment and revitalize the economy, as there are concerns about negative growth for the third consecutive year.
The government estimates that from this year until 2029, the corporate tax burden will be reduced by 45.8 billion euros (approximately 71.2 trillion won).
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