Overview

• The growth booster plan includes “super depreciation” rules allowing companies to deduct 30 percent of new asset costs in the year of purchase and phased cuts to the corporate tax rate from 2028 onward.
• An estimated €48 billion in revenue losses would be split among the federal budget (€18.3 billion), states (€16.6 billion) and municipalities (€13.5 billion).
• At Wednesday’s Ministerpräsidentenkonferenz, state leaders presented a united front under the Konnexitätsprinzip, insisting on full compensation for the shortfalls caused by the stimulus package.
• The federal government has signaled openness to concessions, including options such as adjusting states’ share of VAT receipts or providing targeted grants to underfunded municipalities.
• Negotiators have set a deadline for agreement before the Bundesrat’s July 11 vote to avoid sending the legislation into a time-consuming mediation process.