German government proposes corporate tax incentives to stimulate investment — DPA

According to Deutsche Presse-Agentur (DPA), German Finance Minister Lars Klingbeil is proposing corporate tax incentives to stimulate investment and revive the country’s stagnant economy.

For instance, companies purchasing electric vehicles could claim a 75% tax deduction on the cost in the year of acquisition, DPA reported Saturday, citing a draft bill. The proposal is currently being reviewed by other ministries and requires parliamentary approval. Once enacted, the corporate tax rate is set to drop from 15% to 10%.

Chancellor Friedrich Merz, who assumed office less than a month ago, has pledged swift action to stimulate economic growth. Germany’s GDP has contracted over the past two years, with analysts predicting another year of stagnation, Bloomberg reports.

The agency's experts note that Germany is particularly vulnerable to US President Donald Trump’s trade policies due to its heavy reliance on industrial exports. Merz will meet Trump in Washington this week for their first bilateral talks since taking office.