Overview

• The federal package offers 30 percent special depreciation through 2027 and plans corporate tax cuts from 2028, driving projected revenue losses of €48–50 billion by 2029.
• State premiers including Hendrik Wüst and Michael Kretschmer demand full to 90 percent compensation under the principle “who orders pays” enshrined in the coalition agreement.
• Finance Minister Lars Klingbeil cautions that Wednesday’s Ministerpräsidentenkonferenz is unlikely to deliver a final pact but pledges continued negotiations with states and municipalities.
• The government is exploring compensation via higher VAT shares for states, a temporary reduction in the municipal trade tax levy, and increased federal contributions to housing costs under Bürgergeld.
• Saxony warns of a €60 million budget gap in 2025 and over €330 million by 2029 without compensation, while county associations urge separate relief measures distinct from the new infrastructure fund.