On Jul. 17, GE GVT updated on bill for Growth Opportunities Act.
GE GVT issued draft Law to strengthen growth opportunities, investments and innovation as well as tax simplification and tax fairness (Growth opportunities act).
Overview
With the act targeted measures taken to improve liquidity situation of companies.
To provide impetus so they can invest more in long term and innovate with courage.
This is important to accompany transformation of economy and to strengthen competitiveness, growth opportunities and Germany as a business location.
Context
Economic consequences of multiple crises (pandemic, Russian attack on Ukraine) burden the German economy but also households.
Decarbonization, demographic change major challenges the German economy faces.
To meet the challenges, framework conditions for more growth, investment and innovation must also be created from a tax point of view.
Financial leeway of public budgets for tax policy stimuli severely restricted by crises.
To increase growth opportunities for economy, investment and innovation and enable new technologies and strengthen Germany competitiveness targeted measures taken.
Taking into account the limited scope for public budgets and the background of extraordinarily high inflation rate so they do not create any additional price pressure.
Aug. 30, 2023 Federal Cabinet Approval
On Aug. 30, 2023, GE GVT announced that Federal Cabinet approved the draft of the Growth Opportunities Law, which will provide impetus for growth, especially by SMEs.
Bill improves tax, economic, framework conditions for investing in Germany, will strengthen competitiveness of country as business location, increase its prosperity.
Also supports innovation, transformation to a digital and climate-neutral economy.
Will introduce investment bonus to make it easier for firms to operate in a climate-friendly manner, the bill aims to simplify the German tax system at central points.
Raises thresholds and flat rates, relieves burden of bureaucracy, particularly for SMEs.
GE GVT will ensure greater tax fairness by enforcing tax law even more consistently.
Draft law now enters consultation process with German states and municipalities.
Sep. 22, 2023 Bill Statements
On Sep. 22, 2023, GE GVT published statements from the various associations and professional groups that were invited to comment on the bill as per the cover letter.
Government draft of the growth opportunities law also issued, dated Aug. 29, 2023.
Oct. 2023 Final Bill Published
On Oct. 2, 2023, GE PRL published final version of the Growth opportunities bill that had been passed by with changes to update minor changes since the original draft bill.
This draft included various changes required to other legislation as a result of the bill, which include the Income Tax Act, Act on Tax Incentives for Investments in Climate Protection, Amendment of Introductory Act to the Tax Code, and Investment Tax Act.
It also confirmed that the Federal Ministry of Finance remains responsible for the law.
The draft has now been sent to President of Bundestag, asking that this approved draft legislation be enacted as a matter of urgency, in view of the content and legal effects.
Oct. 16, 2023 Bill Compilation
On Oct. 16, 2023, GE GVT issued a compilation page for the final bill, including the bill itself, as well as the comments from stakeholders on the bill, with the original letter.
The page will be updated as the bill progresses through required legislative process, the details of which are also provided on the page, in a basic format, for information.
Nov. 2023 Aims of the Bill
On Nov. 24, 2023, GE GVT reported on importance of Growth opportunities act to modernize and strengthen the competitiveness of Germany as a business location.
Introduction of investment premium and strengthening of tax incentives for research.
Introduction of adjustments with numerous individual regulations across tax law; with an annual relief potential of around seven billion euros for the economy by 2028.
Tax system is to be made simpler and more modern through changes in central areas.
Temporary reintroduction of declining depreciation for movable assets purchased.
Temporary introduction of degressive depreciation for residential buildings, 6 per cent; improved tax deduction of losses; reporting obligation for national tax arrangements.
Raising the limit for low-value assets to 1000 euros; introduction of a legal regulation on the mandatory use of electronic invoices between domestic companies.
Following decision by Federal Council on Nov. 24, 2023, federal and state governments continue to discuss the Growth Opportunities Act in the Mediation Committee.
Mar. 22, 2024 Act Approved
On Mar. 22, 2024, GE GVT said Federal Council approved the Growth opportunities Act.
In his statement, Christian Lindner said this would support an economic turnaround.
GE GVT also said now Bundestag and Bundesrat had approved the law, it could work to make companies more competitive, and strengthen Germany as a business location.
On same day, GE DIHK said despite Federal Council agreeing a compromise version of reforms, negotiations were a step in the right direction; the law must herald the start of a major economic policy realignment, focused on concrete reforms for growth.
In Apr. 2024, GE GVT said EC approved industrial decarbonization aid, see #208109.
Mar. 27, 2024 Act Issued
On Mar. 27, 2024, GE GVT issued law to strengthen growth opportunities, investments and innovation as well as tax simplification and tax fairness (growth opportunities act).
Document dated Mar. 27, 2024, was added on Oct. 9, 2024 due to editorial backfill.
Enters into force on the day following its promulgation subject to the following.
Art 35 in force Jan, 1, 2020, Art 2 in force Dec. 21, 2022, Art 3 in force Jan. 1, 2023,
Arts 5, 14, 22, 23, 25, 27, 31, 36, 38, 39, 40, 42, 44, 45, 47(1), (2), (5), (6), 48, 49, 51, 52 in force Jan. 1, 2024; Art 1 in force Mar. 1, 2024, Art 6 in force Apr, 1, 2024.
Arts 10, 15, 19, 28, 32, 33, 41, 43 in force Jan. 1, 2025, Art 47(3), (4) Jul. 1, 2025.
Art 7 in force Jan. 1, 2026, Arts 16, 20, Jan. 1, 2027, Arts 8, 29 in force Jan. 1, 2028.
