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4h ago

Klingbeil Rejects State Compensation, Puts Germany’s Tax Relief Package at Risk

A looming December Bundesrat deadline leaves the bill still awaiting Bundestag passage, then state consent.

Bundesfinanzminister Lars Klingbeil (SPD) hat vor einem Scheitern der geplanten Senkung der Mehrwertsteuer in der Gastronomie und einer Erhöhung der Pendlerpauschale.
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Ein Kellner trägt ein Tablett mit benutzten Gläsern und leeren Flaschen.

Overview

  • The proposal would cut VAT on restaurant meals to 7% in 2026, raise the commuter allowance from the first kilometer, and lift the Ehrenamtspauschale to €960.
  • Finance Minister Lars Klingbeil ruled out federal compensation for Länder losses and warned that holdouts could torpedo the measures.
  • The Bundesrat estimates tax shortfalls of about €11.2 billion for states and €1.4 billion for municipalities between 2026 and 2030.
  • Reporting cites annual costs of roughly €3.6 billion for the gastronomy VAT cut and €1.1 billion for the commuter change.
  • The package still requires Bundestag approval and subsequent Bundesrat consent, with a 20 December session viewed as crucial for a planned 1 January 2026 start.