Insights
TAX & BUSINESS
Planned Legislative Changes
With the planned Tax Amendment Act 2025 (AbgÄG 2025) the existing provisions are to be aligned with current economic developments and European requirements, to simplify administration and to strengthen tax fairness and legal certainty.
For companies as well as for private individuals it is worthwhile to take an early look at the most important planned changes and to consider possible courses of action. The legislation is still pending.
- The tax‑free voluntary allowance for charitable activities cannot currently be paid at the same time as flat‑rate travel expense reimbursements to athletes, referees and sports supervisors. From 1 January 2026 this is to be improved insofar as a monthly assessment will apply to the exclusion of the tax‑free voluntary allowance when flat‑rate travel expense reimbursements are also received. It will then be possible to switch between the two options each month. The annual maximum amounts of EUR 1,000 (small voluntary allowance) and EUR 3,000 (large voluntary allowance) are to be reduced proportionally.
- In order to avoid an over‑compensation through a flat‑rate consideration of travel costs in connection with mass‑transport means, from 1 January 2026 only the actual costs or the notional costs for the cheapest mass‑transport means, limited to the costs actually incurred by the employee in the calendar year, may be reimbursed tax‑free by the employer or claimed by the employee as employment‑related expenses.
- In principle, in the case of the gratuitous transfer of a rented asset (in particular a building) the depreciation (AfA) of the predecessor is to be continued. However, if a gratuitously transferred building was used by the transferor for income‑generating purposes for the last time before 1 April 2012, the Tax Amendment Act 2025 provides that, in the event of a subsequent rental of this building by the successor, the (usually higher) notional acquisition cost may be used as the basis for depreciation.
- The tax office for large enterprises is, among other things, responsible for businesses whose turnover exceeds a certain threshold. Because the thresholds for balance‑sheet total and turnover in the Companies Act (Unternehmensgesetzbuch) have been increased by 25 % due to the heightened inflation of recent years, the turnover threshold for the jurisdiction of the tax office for large enterprises is to be raised from EUR 10 million to EUR 12.5 million as of 1 January 2026. This does not affect procedures and external audits already pending with the tax office for large enterprises as of 31 December 2025.
- The following amendment is planned in the Real Estate Transfer Tax Act (Grunderwerbsteuergesetz) regarding tax liability: where the consolidation of shares and the change of shareholders occur simultaneously, the person in whose hands the consolidation of the shares takes place shall be the debtor of the real estate transfer tax. If only a share consolidation occurs, the company shall remain the tax debtor.
- In the Value Added Tax Act (Umsatzsteuergesetz) the current case law of the European Court of Justice on invoice correction will be taken into account: if VAT is incorrectly (in particular overstated) shown on an invoice to a final consumer (private individual), the entrepreneur is not liable for that VAT on the basis of the invoicing. Conversely, for invoices to a business, incorrectly shown VAT shall continue to be due by virtue of the invoice, regardless of whether the receiving business is entitled to deduct input tax.
- Planned is the extension of tobacco tax and the tobacco monopoly to novel alternative products and a general adjustment of the tax rates.