Skills shortage - Heil takes a critical view of tax bonus for foreign skilled workers
Federal Labor Minister Hubertus Heil critically views the planned tax relaxations for foreign specialized workers. "This belongs to the department 'We need to take another look at this'", said the SPD politician in Deutschlandfunk. "I admit that I'm not particularly happy with the agreement on this point because it can lead to misunderstandings."
The FDP fraction leader Christian Dürr defended the plans. "We want to introduce a recruitment bonus for specialists that we urgently need", he told the German Press Agency in Berlin. "The vast majority of EU countries have such a regulation. And as the largest economy in Europe, we've been lagging behind so far."
Tax bonus part of the planned Growth Initiative
The planned tax bonus can be found in the 31-page strong Growth Initiative, which the coalition summit agreed upon in connection with the compromise on the Federal Budget 2025 in the past week. The goal of the measures contained in the document is to revive the stagnating German economy.
In the paper, it says: "To make Germany more attractive to foreign specialists, the Federal Government will also introduce tax incentives for employment in Germany. Newly recruited specialists can therefore declare up to 30, 20, and 10 percent of their gross wage tax-free." For this exemption, a lower and upper limit for the gross wage will be defined.
Sharp criticism from the opposition
CSU parliamentary group chairman Alexander Dobrindt expressed indignation: "This is a real discrimination program for the native population that the traffic light coalition has thought up", he told the dpa. "How can one imagine that? Austrians or Dutch people will pay less taxes in the future if they work in Germany?" Similarly, BSW chairman Sahra Wagenknecht spoke of a "policy against its own population". She told the dpa in Dresden: "The plans are a slap in the face for the average citizen, who has always paid his taxes and duties faithfully."
The regulation should only apply to specialists
FDP fraction leader Dürr made it clear that the tax advantage should only apply to specialists and not to refugees, as Wagenknecht alleged. The traffic light coalition has created a new immigration law with clear criteria and quick visa procedures. "However, we remain a country with bureaucratic hurdles and high taxes. That's why it's completely right to offer tax incentives as a recruitment bonus for well-trained specialists", explained Dürr.
Heil, however, emphasized that such incentives are not the deciding factor if Germany is to be attractive to specialists. "It's more about the question of whether we recruit, whether we highlight the strengths of our country", said the SPD politician. "That's a bit vague formulated in this paper", Heil added during his summer tour in Sigmaringen. "If it had been up to me, it wouldn't have been there at all."
Criticism also from the traffic light coalition
Critical voices were also heard from the traffic light parties SPD and Greens: "I completely understand if that irritates people," said Saxony's Social Minister Petra Köpping (SPD) to the Tagesspiegel. The Greens labor market politician Beate Müller-Gemmeke told the newspaper: "There is a good reason for an equal treatment principle in our labor law." In her view, this would not be ensured if certain groups had more money in their wallets due to tax incentives for equal work.
Tax incentives have been a topic for years
Federal Economics Minister Robert Habeck (Greens) had previously pointed out that other European countries had already granted tax incentives for highly qualified personnel for years. Such a regulation has been in effect in the Netherlands since the beginning of the year, similar to the one planned by the traffic light coalition.
The federal government had already named 15 EU countries with such tax advantages in a parliamentary response in 2018. The focus was primarily on managers in companies and other highly qualified and well-paid migrants. Higher tax rates than in their home country often deter such target groups from switching to another country.
Bernd Meurer, president of the Federal Association of Private Providers of Social Services, told the Redaktionsnetzwerk Deutschland (RND): "We welcome all steps to motivate international forces to engage in Germany." Migrant workers also had many additional costs during the phase of arrival.
- Hubertus Heil, the SPD's Federal Labor Minister, expressed reservations about the proposed tax relaxations for foreign specialized workers, suggesting a need for reevaluation.
- Christian Dürr, the FDP fraction leader, advocated for the introduction of a recruitment bonus for necessary specialists, citing the majority of EU countries with similar regulations.
- The tax bonus is part of the 31-page Growth Initiative, a measure aimed at revitalizing Germany's stagnating economy and making Germany more attractive to foreign specialists through tax incentives.
- Under the initiative, newly recruited specialists can declare up to 30, 20, or 10 percent of their gross wage tax-free, with defined lower and upper limits for the gross wage.
- The tax advantage is intended for specialists, not refugees, as criticism suggested, with clear criteria and quick visa procedures established through the new immigration law.
- CSU parliamentary group chairman Alexander Dobrindt criticized the plan, describing it as a "discrimination program" for the native population, and BSW chairman Sahra Wagenknecht agreed, likening it to a "policy against its own population."
- Heil, however, emphasized that incentives alone do not determine Germany's attractiveness to specialists, arguing that highlighting the country's strengths and recruitment efforts are more crucial.
- Similar concerns were expressed by critical voices within the traffic light coalition, including Saxony's Social Minister Petra Köpping and Greens labor market politician Beate Müller-Gemmeke, who advocated for an equal treatment principle in labor law.
- Federal Economics Minister Robert Habeck had previously highlighted the implementation of tax incentives for highly qualified personnel in numerous European countries, including the Netherlands.
- Bernd Meurer, president of the Federal Association of Private Providers of Social Services, welcomed all steps to encourage international workers to engage in Germany, acknowledging the additional costs migrants face during their arrival phase.
