German income tax reform CDU opposition to SPD finance ministry proposal, Digi Mart USA News (Germany): The CDU has threatened to block the tax reform drafted by the SPD-led Federal Ministry of Finance. According to the Handelsblatt, deputy chairman of the Union parliamentary group Mathias Middelberg (CDU) said the income tax reform is “not approvable without a truly practicable model that allows partnerships to switch to corporate income tax taxation.”
As part of its reform program, the coalition of CDU/CSU and SPD agreed on a tax reform that raises the top tax rate from 45 to 47 percent. The coalition had previously decided to gradually reduce the corporate income tax from 15 to 10 percent.
Because of the two reforms, taxation of businesses would diverge by seven percentage points depending on their legal form. “Such a wide divergence in taxation depending on the legal form of the company is unacceptable,” Middelberg said.
The coalition had agreed to make the so-called option model more practical, which allows partnerships to switch from income tax to corporate tax. According to a coalition resolution from early July, the federal government is to present an improved option model by autumn 2026.
“Unfortunately, there is still no proposal for this,” Middelberg criticized. “Without a practicable option model, in my view, there can be no approval of the planned tax increase.”
