Tax policy Germany: New coalition agreement brings tax policy shifts
02.06.2025
The new German federal government has adopted tax changes for companies in its coalition agreement. These include corporate taxation, tax relief for work and income, as well as for electromobility and energy efficiency. The Ecovis tax advisors explain the details.
The new coalition of the Christian Democratic Union (CDU), Christian Social Union (CSU), and Social Democratic Party (SPD) has also set numerous goals in its coalition agreement to strengthen the economy and Germany as a business location.
Tax incentives for investment
The coalition agreement introduces several changes to corporate taxation, notably a 30% accelerated depreciation for certain business investments, limited to the years 2025-2027.This measure aims to encourage investments in new business assets, particularly in the technology and infrastructure sectors. In addition, tax breaks for research and development spending are to be expanded. The goal is to boost companies’ innovation power – this could be achieved in the future through expanded business expense deductions or targeted R&D bonuses.
Corporate taxation
The corporate tax rate will be gradually reduced by 1% each year starting in 2028, from the current rate of 15%. The solidarity surcharge will remain, and the minimum trade tax rate will increase from 200% to 280%, raising the tax burden on businesses in some regions. The introduction of an investment allowance for small and medium-sized enterprises (up to EUR 50,000 annually for future investments) is intended to make Germany an attractive location for business again. As things stand at present, there are no plans to increase income tax rates.
Tax relief in Germany would be a positive signal for companies and the location. Marion Dechant, Tax Advisor, ECOVIS Wirtschaftstreuhand GmbH Auditors, Munich, Germany
Energy taxes
In order to reduce energy prices, the electricity tax is to be reduced to the minimum level specified by European law. Also, tax exemptions for agricultural diesel engines are to be maintained, protecting farmers from additional costs.
Tax relief for work and income
A new provision could allow for tax-free overtime in certain sectors, which may reduce the overall tax burden for employees working overtime. Additionally, retirees may benefit from a EUR 2,000 tax-free monthly allowance if they continue working after reaching the official retirement age. This is intended to support older citizens, particularly those who wish to remain active in the workforce after retirement. The commuter allowance is expected to rise to EUR 0.38 per kilometre starting in 2026 (currently EUR 0.30). This change could make commuting more financially viable for individuals living in more remote areas.
Electromobility
Electric vehicles used as company cars are to receive tax incentives by increasing the gross price limit to EUR 100,000. In addition, special depreciation allowances are to be introduced for electric vehicles to promote the transformation of the transport sector. Furthermore, the motor vehicle tax exemption for electric vehicles will be extended until 2035.
E-invoicing Poland: What companies need to know about the introduction
30.05.2025
Polish lawmakers are working on introducing a national e-invoice system (KSeF). Currently, taxpayers can use the platform for issuing and receiving electronic invoices voluntarily; starting in 2026, use of the system will be mandatory. The Ecovis experts recommend that companies prepare now.
The background to the national e-invoice system
KSeF is an IT system for sending, receiving and storing structured invoices containing the mandatory fields specified by the regulations in xml file format (so-called e-invoices). Once the invoice data is entered into the system, the document is assigned a unique identification number and the system verifies that the data complies with the structured invoice template. The invoice itself will be deemed to have been issued on the day it is uploaded to the system and to have been received on the day it is assigned a KSeF number.
The basic functions of the system include:
Issuing of invoices by sellers
Receipt of invoices by purchasers
Real-time control of transactions by tax administration authorities
The granting and withdrawal of rights and authorisation in the system
E-invoices can also be issued using free tools to be made available by the Ministry of Finance or commercial software.
Who must issue electronic invoices using the KSeF system
The KSeF system will cover all active VAT taxpayers, entrepreneurs exempt from VAT and taxpayers identified in Poland for the OSS procedure with a Polish TIN.
The obligation to issue e-invoices will not apply, among others, to:
Taxpayers who have neither the seat of their economic activity nor a permanent place of business activity in the territory of Poland
Taxpayers who do not have the seat of their economic activity in the territory of Poland but have a permanent place of business activity in Poland if this is not connected with the invoiced supply of goods or the provision of services.
We can assist you during implementation a system to issue e-invoices in your entity. Hubert Kaczyński, Tax Advisor, ECOVIS Poland, Warsaw, Poland
When does the KSeF obligation apply
From 2026 onwards, the mandatory use for taxpayers will be staggered. Thus, the KSeF will be mandatory:
From 1 February 2026 for large entities (who exceeded PLN 200 million in turnover in the previous year)
From 1 April 2026 for all entities
Challenges related to the implementation of the system
The key challenge associated with the regulation is ensuring the accuracy and completeness of the data contained in the e-invoice.
Adapting a company to issue and receive e-invoices will not only require the implementation of modifications to IT systems but also the introduction of appropriate changes to business processes for issuing, receiving and circulating invoices, as well as to contracts and regulations.
KSef vs. the VIDA package
The Ministry of Finance has no plans to abandon the mandatory implementation of KSeF or to postpone it until the EU legislation related to the so-called VIDA package comes into force.
ViDA (VAT in the Digital Age) is a package published on 8 December 2022 by the European Commission, which is linked to the EU’s goal of establishing a smoothly functioning internal market within VAT, which involves mandatory e-invoicing in the EU.
The Ministry of Finance assures that the implementation of the ViDA package will not change the functionality of KSeF. According to the Ministry, the Polish system will be able to meet the requirements for issuing e-invoices and the reporting data for EU purposes. Furthermore, it out that the EU e-invoice format under ViDA will be mostly mandatory for cross-border transactions, while KSeF will remain a national tool.
Sustainable tax Türkiye: Tax instruments on the path to sustainability
28.05.2025
With the tax instruments gradually introduced over the years to promote sustainability, Türkiye aims to move closer to global climate targets and align with EU regulations such as the Carbon Border Adjustment Mechanism (CBAM).
The concept of sustainability is no longer limited to environmental policies; it has become central to tax policy as well. Sustainable tax practices are not only designed to raise public revenues but also to promote environmental protection, social justice, and economic stability. This is particularly critical for developing countries like Türkiye, where climate challenges and income inequality are prominent.
Sustainable tax instruments in Türkiye
Türkiye has introduced several tax instruments to support sustainability:
Environmental cleaning tax (ÇTV): Collected via water bills by municipalities, this tax funds waste collection and environmental services.
Motor vehicles tax (MTV): Vehicle emissions have been included in the tax calculation since 2018.
Plastic bag fee: Introduced in 2019, single-use plastic bags are sold for TRY 0.50 to reduce consumption.
Energy efficiency incentives: VAT and SCT exemptions are offered for renewable energy investments and energy-efficient products.
In 2025, Türkiye’s Banking Regulation and Supervision Agency (BRSA) introduced the green asset ratio, encouraging banks to finance environmentally sustainable projects. Additionally, mandatory sustainability reporting was introduced in 2024 for large companies exceeding certain thresholds in assets, revenue or employment.
Contact us if you have any tax-related questions concerning environmental and sustainability issues. Mustafa Bulut, CPA, Partner, ECOVIS DİPLOMAT DENETİM VE YMM A.S., Izmir, Türkiye
Why is it relevant now?
Türkiye aims to align with global climate goals while adapting to EU regulations such as the CBAM. At the same time, its current tax structure relies heavily on indirect taxes – over 65% of total revenue – placing a greater burden on low-income groups. At the same time, environmental taxes account for only 1.2% of total revenue, far below the EU average of 2.4%. These figures highlight the urgent need for a shift towards more equitable and sustainable taxation.
Conclusion and recommendations
To achieve its green transformation and economic resilience, Türkiye must restructure its tax system. This includes increasing environmental taxes, shifting to direct taxes such as income and wealth taxes, incentivising green investments and combating informality using digital tools. These reforms would not only support climate goals but also promote social equity and long-term fiscal balance, say the Ecovis advisors.
For further information please contact:
Mustafa Bulut, CPA, Partner, ECOVIS DİPLOMAT DENETİM VE YMM A.S., Izmir, Türkiye
Email: mbulut@diplomatymm.com.tr
Efil Çetin, CPA, ECOVIS DİPLOMAT DENETİM VE YMM A.S., Izmir, Türkiye
Email: ecetin@diplomatymm.com.tr
