German Cabinet Approves €10 Billion Income-Tax Reform
The package would raise child benefits and the basic allowance while adding a new 47% rate for income above €280,000.
- On Wednesday, Germany's Federal Cabinet approved a €10 billion income-tax reform package designed to ease burdens on low- and middle-income households, particularly families with children.
- The government will partly offset relief costs by raising taxes on high earners, introducing a new 47% "super-rich tax" on annual income above €280,000. Klingbeil said, "We have also decided to make the tax system fairer."
- Under the plan, child benefits will rise to €267 per month next year, the basic tax-free allowance increases to €12,564 in 2027, and the employee business expense lump sum rises from €1,230 to €1,430.
- The bill requires approval from the Bundestag and Bundesrat, where the coalition must secure support from German states that receive 42.5 percent of tax revenues. Further debate and changes remain possible.
- Critics argue the relief may not compensate for inflation; the German Chamber of Industry and Commerce complained the increase was a "tax on small and medium-sized businesses," while Green parliamentarian Andreas Audretsch warned of offsetting benefit cuts.
33 Articles
33 Articles
The German Government's Council of Ministers approved on Wednesday the bill on the "early retirement pension", under which all children in Germany will receive from the age of six an initial capital of €10 per month from the State for private retirement until they reach the age of 18. This measure, which was already introduced last December in the framework of a broader bill to strengthen the private pillar of the German pension system, can be s…
What does Germany's '€10 billion' income tax reform mean for you?
A higher basic allowance and more benefits for parents: Germany is pushing forward with its major income tax reforms, aimed at relieving low and middle income households. So how much can you really expect to save?
Readers discuss tax reform 2027: Are children's allowances and allowances sufficient to compensate for rising burdens?
The German government's office approved a EUR 10 billion income tax reform package this Wednesday, designed to ease the tax burden on low- and middle-income families, with a special focus on households with children. The measures will be implemented in two stages and will fully enter into force in 2028, the Ministry of Finance informed. "We are providing relief to families with children," said Finance Minister Lars Klingbeil. "We are ensuring th…
CDU politician Florian Dorn sees the draft tax reform only as a first step. However, in the case of the cold progression and on the expenditure side, it had to be readjusted, says Dorn.
Despite criticism from associations and Minister of Economics Reiche: The government has approved the plans for an income tax reform. Our computer shows what this means for you.
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