Corporate tax reform: What effects can be expected?

Corporate tax reform is one of the most important projects of the German coalition government, aimed at improving the conditions for employment and growth in Germany and at stabilizing public finances. Gerhard Stratthaus, Minister of Finance for Baden-Wuerttemberg, views corporate tax reform as an essential pillar for enhancing Germany's appeal for domestic and foreign investors. Also for an improvement of the situation on the labour market, further business-friendly reforms are necessary. For Stefan Homburg, University of Hanover, on the other hand, the slated reforms are a step backwards, not only behind "the ambitious tax reform measures as suggested by Friedrich Merz" but also behind the quo status. Alfons Kühn, German Chamber of Industry and Commerce, Berlin, sees the lowering of the corporate tax rate as an important first step. In the long term, one should not lose sight of the goal of a regular synthetic taxation: "If the tax rate is lowered for profits and capital gains, however, but the burdens on other sources of income increase, this can be understood just as wrongly as if, for example, R&D activity was made more expensive via a formalistic tax on functional shifts." Clemens Fuest, University of Cologne, draws a mixed balance: "While the reform brings considerable improvements in some areas, other goals are clearly not met." Ingolf Deubel, Finance Minister of Rheinland-Palatinate, points out that the ambitious aims of the reform - the creation of a system of taxation and tax rates that can also stand up in international competition - are at odds with the strained situation of public finances.