Ensuring the Execution of Proposals: The Commission has already undertaken various measures to guarantee the realization of their proposals.
Germany's major political parties have released their manifestos for the 2025 federal election, outlining their visions for the country's future. While specific tax policy details are not fully documented, some relevant information and context can be provided.
The CDU/CSU, the largest party, has primarily focused on supporting Ukraine, with no specific detailed tax policy indicated in the available sources. The party proposes gradual relief in the lower and middle ranges of the income tax scale, with a top tax rate applying to annual taxable income of 80,000 euros or more. Additionally, they aim to fully abolish the solidarity surcharge, increase the commuter allowance, reduce corporate tax rates to 25 percent, and lower electricity tax and network charges.
The SPD, the Greens, and other parties have highlighted broader topics such as pension reform and immigration support, but without explicit tax policy details. The SPD, however, has proposed reducing electricity tax and network charges, promoting investments with an investment premium, and reducing the value-added tax on food from 7% to 5%.
The FDP, historically a pro-business party, has proposed pension reforms but no explicit corporate or income tax changes are documented yet in 2025 sources. The FDP's tax policy program aims to apply the top income tax rate only from a taxable annual income of 96,600 euros and wants a separate reduced VAT rate for electricity. They also plan to make equity capital taxable by allowing the deductibility of imputed interest on the equity capital.
The AfD and the BSW, a populist splinter group that narrowly missed Bundestag entry, have no detailed tax policy profiles publicly available from these sources. The AfD, with its significant vote increase, proposes abolishing inheritance tax, wealth tax, property tax, all CO2 levies, and even increasing the real estate transfer tax for non-EU citizens. They also propose a reduced VAT rate of 7 percent for daily childcare needs and a full VAT exemption for freelance musicians, artists, and teachers.
Regarding corporate tax rates, Germany is legislating a gradual corporate tax rate reduction from the current 15% to 10%, starting in 2028 over five annual steps of one percentage point each. This policy is not directly linked to any party manifesto for the upcoming government.
Germany continues to comply with EU and OECD tax frameworks, such as the Global Minimum Tax rules affecting corporate taxation policy. The broader economic context includes Germany facing significant economic and reform challenges post-election, with a focus on infrastructure, digitalization, energy transition, and social issues. International investors are watching closely for any structural reforms that a new government might implement, including in tax policy, but no clear consensus or comprehensive party tax platform analysis is currently public.
The Left Party's tax policy program foresees significant net burdens, including increasing the top income tax rate to 53% at 81,000 euros, which then increases again to 75% as a "wealth tax" at 1 million euros in taxable income. Unlike the CDU/CSU, the SPD sees clear, albeit relatively unrefined, tax increases, including the capital gains tax being reintegrated into income tax, increasing inheritance tax, especially for business assets, reintroducing the wealth tax, and introducing a financial transaction tax.
As coalition negotiations and government formation proceed, further developments are likely in the tax policy landscape of Germany's 2025 federal election.
- In the 2025 German federal election, each major party, including the CDU/CSU, SPD, Greens, FDP, AfD, and the Left Party, has presented a manifesto detailing their visions for policy-and-legislation, including taxation matters.
- The CDU/CSU and the SPD parties have proposed reductions in electricity tax and network charges, while the SPD also wants to promote investments and reduce the value-added tax on food. On the other hand, the Left Party's tax policy includes increasing the top income tax rate and reintroducing the wealth tax.
