Growth initiative - Habeck defends tax incentive for foreign skilled workers
Federal Economic Minister Robert Habeck justifies planned tax incentives for foreign specialists, taking into account the international competitive situation. With this measure, one can close a "large skills gap," said the Green politician at the beginning of his summer trip in Stuttgart. "We see that other European countries grant such tax benefits for specialists when they come to the country," Habeck emphasized.
During company visits, he was informed that specialists were going to other countries, such as Scandinavia, due to better tax conditions. "Giving it a try, attracting people to Germany through better tax conditions, is worth a shot. And that's ultimately good for businesses as well," he said.
Tax incentive is part of a growth initiative
The so-called Growth Initiative was agreed upon by Habeck, Chancellor Olaf Scholz (SPD), and Finance Minister Christian Lindner (FDP) in their negotiations on the federal budget 2025. Planned is that "newly recruited specialists can be exempt from paying taxes on their gross salary for the first three years at the rates of 30%, 20%, and 10%." A lower and upper limit for the gross salary will be defined for this exemption. After five years, the effect of this measure should be examined.
In response to the question of whether German workers would be discriminated against, Habeck replied that the tax rebate is just one of many measures against the labor shortage: "The paper we passed has many different components: Better remuneration if one continues to work beyond the statutory retirement age. And people in unemployment benefits will be motivated to do more."
The trade unions criticized the employment policy measures as a false signal. For mobilizing specialists, clearer signals for more childcare and caregiving were needed, said Yasmin Fahimi, CEO of the German Trade Union Federation (DGB). The tax advantage for overtime and foreign specialists also carries social tension.
- Robert Habeck, during his visit to Baden-Württemberg in Germany, discussed the issue of attracting foreign specialists, highlighting the tax incentives offered by Scandinavia as a point of comparison.
- The upcoming tax incentive for foreign specialists is a part of the larger Growth Initiative, an agreement between Habeck, Olaf Scholz, and Christian Lindner to stimulate economic growth.
- As part of this initiative, newly recruited specialists could potentially be exempt from paying taxes on their gross salary for the first three years, with rates of 30%, 20%, and 10%.
- In response to concerns about discrimination against German workers, Habeck pointed out that the tax rebate is just one piece of a larger employment policy, which includes measures like better remuneration for workers beyond retirement age and incentives for unemployment benefits recipients to seek employment.
- Despite these efforts, the German Trade Union Federation (DGB) criticized the employment policy measures, calling for clearer signals in the form of improved childcare and caregiving facilities to better attract specialists, and expressing concern about potential social tensions resulting from tax advantages for overtime and foreign specialists.
