German upper house to vote on corporate tax cuts and rent relief
The tax relief package, already approved by the lower house of parliament, includes more options for businesses to account for the depreciation in the value of their machinery, in a move designed to encourage companies to increase investments.
It also promises to gradually reduce the corporate tax rate from the current 15 per cent to 10 per cent by 2032. In addition, tax incentives for electric car purchases are planned.
The package is estimated to cost the federal government, states and local authorities around €48 billion (US$56 billion) in tax revenue. To support Germany's states, some of which are heavily indebted, the federal government has agreed to cover their tax losses for a limited period until 2029 through the distribution of VAT revenues.
The upper house, or Bundesrat, is also due to decide whether to extend rent controls in popular residential areas until the end of 2029.
The rules, introduced in 2015, limit new rents to tenants in these areas to 10 per cent above the local average.
Both measures were agreed as part of the government's coalition agreement between Chancellor Friedrich Merz's conservatives and the Social Democrats.
Merz's government, which took office in May, vowed to turn the country's struggling economy around through investment and deregulation for businesses, as well as to ease the burden on tenants in the country's overheated housing market.
— BERNAMA-dpa
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