Germany’s Ministry of Finance unveiled a draft proposal for the 2024 Annual Tax Act on 17 May, 2024. The 243-page document focuses on technical adjustments to comply with recent EU regulations, court decisions, and streamlining previous tax law changes.
While no major tax reforms or rate adjustments are included, the proposal offers some targeted relief.
Key highlights
- Tax-neutral asset transfers between identical partnerships: This provision addresses a recent court ruling, simplifying transfers within such structures.
- Increased VAT thresholds for small businesses: Businesses with lower turnovers will benefit from this EU-driven change.
- Technical updates across various tax laws: Corporate income tax, trade tax, and reorganisation tax will see adjustments for better clarity.
- Wage tax relief for specific employee benefits: Measures aim to ease the tax burden on certain in-kind benefits.
- Elimination of a complex real estate tax concept: This simplifies real estate transfer tax calculations and avoids potential double taxation.
The proposal needs government approval before it can enter the legislative process. While a finalisation by year-end is the goal, the exact timeline remains unknown for the time being.
