Federal cabinet discusses tax changes and child benefit increase
In order to adapt to Inflation, income tax rates will be increased in two steps in the years 2025 and 2026. This also applies to tax-exempt allowances for children. Furthermore, the child allowance is planned to be increased to 255 Euro per month starting from January 1, 2025. These changes must be approved by both the Bundestag and the Bundesrat.
The Federal Cabinet, led by Christian Lindner of the FDP, has proposed these tax changes to counteract inflation. The increase in income tax rates and tax-exempt allowances for children is expected to take effect in 2025 and 2026. Additionally, the FDP, as part of the Federal Cabinet, is advocating for an increase in the child allowance to 255 Euro per month, effective from January 1, 2025. These tax changes require approval from both the Bundestag and the Bundesrat.
