Employers hold no regard for the tax bonus for foreigners

Can foreign top experts be attracted to Germany with tax incentives for relocation? Employers are skeptical about the plans of the German government. Other factors are more important to win specialists.

Finance Minister Lindner wants to attract sought-after specialists to Germany with tax incentives. However, this concept meets with little enthusiasm among business representatives. "The proposal contradicts tax fairness and sends a false internal political signal," said President of the German Employers' Association Rainer Dulger. "It could also cause unrest in employment peace for all employees. More net pay from gross for all is what matters, then it will be attractive again for foreign specialists," so Dulger.

As part of their "Growth Initiative," the government plans to introduce tax incentives for employment in Germany - to make Germany more attractive for foreign specialists. It is planned that newly recruited specialists can be tax-exempt from the first three years on 30, 20 and 10 percent of their gross salary. For this exemption, a lower and upper limit for the gross salary should be defined.

Bundesfinance Minister Christian Lindner stated that the tax incentives should apply to "top specialists" from abroad who could receive a tax recruitment premium. However, Lindner also acknowledged that the proposal had been met with reservations from employers. "We will first seek dialogue. We will not introduce anything that the employers do not actively use," said Lindner.

Not an instrument for the broad base

Peter Adrian, President of the German Industry and Trade Chamber, expressed reservations about the planned tax incentives. "It's right to think about how we can make the influx of foreign specialists more attractive," he said. "It was to be expected that the discussion of unequal treatment with colleagues in Germany would come up as soon as a tax deduction was mentioned."

Dulger, President of the Federal Association of German Employers' Associations, said about the planned tax incentives, "Currently, Germany is a high-tax country. We have a complicated language. When people come to this country, they don't get childcare, they don't find housing. These are the problems we have to deal with. We are not really convinced by this proposal."

Industry President Siegfried Russwurm emphasized that tax incentives are a specific tool for targeted recruitment of certain specialists from abroad in other European countries. "Typically, it's about individual persons whom the authorities are named directly. The instrument to use it in the broad base is not my approach," emphasized Russwurm.

"Immediately, questions about equal treatment arise. To attract a broad base of specialist personnel from abroad, other measures would be more significant: for example, deciding on the recognition of foreign diplomas and qualifications and simplifying and accelerating the procedures for employment migration in general."

Despite the Federal Finance Ministry's proposal for tax incentives to attract foreign specialists, the German Industrial Association and other employers express concern, with President Rainer Dulger stating that more net pay is key.
In response to Christian Lindner's plan to offer tax incentives for 'top specialists' from abroad, Siegfried Russwurm, President of Industry, suggests that tax incentives should be used as a targeted tool for specific recruitment, not a broad-based solution.
The German government's 'Growth Initiative', which includes plans for tax incentives to make Germany more attractive for foreign specialists, has been met with reservations from the German Employers' Association and other industry leaders, who believe that addressing issues like language barriers, housing, and childcare would be more effective.