The maximum special depreciation for movable, depreciable fixed assets was increased to 40%.
Newly built residential buildings can be depreciated at 5% in a degressive manner, which promotes residential construction through faster refinancing.
The research allowance can be increased from 25% to 35% upon request.
The accounting requirement was raised to a total turnover of 800,000 euros or a profit of 80,000 euros.
Losses of up to 1 million euros (up to 2 million euros in the case of joint assessment) can be deducted without restriction from 2024.
Losses of up to 1 million euros (up to 2 million euros in the case of joint assessment) can be deducted without restriction from 2024.
The current situation in the German economy is characterized by a very mixed picture. Although there are slight growth impulses, a lower inflation rate and rising real wages, which can be positive, the overall situation remains challenging. General uncertainty, the global situation and the continuing shortage of skilled workers are contributing to a subdued mood. In this situation, the renewed Growth Opportunities Act provides important impetus for necessary reforms and investments. We help companies understand the relevant regulations of the new law and make optimal use of the resulting benefits.
What does the Growth Opportunities Act offer?
Tax breaks and administrative cuts are intended to promote the competitiveness of companies and create investment incentives. The focus is in particular on small and medium-sized companies as well as the construction and real estate sector.
The maximum special depreciation for movable, depreciable fixed assets was increased from 20% to 40%. For entrepreneurs, this means that investment costs can be written off more quickly and liquidity can be improved. A good opportunity to buy new machines or upgrade your vehicle fleet without burdening your balance sheet too much!
A degressive depreciation of 5% was introduced for newly constructed residential buildings. This regulation applies to buildings whose construction began after September 30, 2023. For the construction and real estate sector, this means that investment costs can be written off more quickly and new projects can be refinanced more quickly. Klara Geywitz, Federal Minister of Housing, Urban Development and Construction, explained: “For six years, writing off six percent of investment costs — that is our offer to get residential construction going. ”
The research allowance can be increased from 25% to 35% upon request. This is a significant incentive for small and medium-sized enterprises to invest in innovation and research. New materials, sustainable construction methods or energy-efficient technologies can therefore be better financed.
The limit for the accounting requirement was raised to a total turnover of 800,000 euros or a profit of 80,000 euros. For smaller companies, this means a significant administrative burden, as there are less strict accounting rules and therefore more time for their core business.
One significant change concerns loss offsetting: From the 2024 assessment period, losses of up to 1 million euros (up to 2 million euros in the case of joint assessment) can be deducted without restriction. Losses that go beyond that can be offset against up to 70% of the remaining profit. For example, losses from pandemic years can be used efficiently to obtain tax benefits and get companies back on track for success.
The Growth Opportunities Act offers companies good opportunities to increase their competitiveness through targeted tax breaks and investment incentives. The new regulations should be used to refinance your projects more quickly and benefit from increased depreciation and research allowances. Now is the ideal time to take full advantage of the law and set your company on the road to success.
The new provisions of the Growth Opportunities Act offer significant financial and administrative simplifications. They give companies the opportunity to make the necessary investments and take advantage of tax advantages in the process. This not only creates air to breathe, but also new opportunities for growth. For the construction and real estate sector, the degressive depreciation options represent a significant advantage. Projects can be refinanced more quickly, which is an important impetus, particularly in times of housing shortages and rising construction costs. Do you have any questions about the new regulations? We're here to help you understand and implement the changes.
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