- Opinions: Doubts about tax incentives for foreign skilled workers
The parliamentary scientific service has significant doubts about the planned tax rebate for foreign skilled workers. A strict interpretation of the law would unlawfully disadvantage employees who have been working in Germany for longer. "The disadvantage may be suitable and necessary to achieve the economic policy goal, but it is no longer appropriate," the opinion commissioned by the Alliance for Progress (BSW) states, which has been obtained by the German Press Agency.
At the same time, the experts point out that the Federal Constitutional Court has granted the legislator a much greater scope for maneuver in tax subsidies in the past. If one applies more lenient standards, as the Constitutional Court does, "the tax inequality could be justified," the opinion states. In that case, it would be sufficient to name a factual reason for the different taxation.
Highly skilled workers urgently sought
As part of their "Growth Initiative," the traffic light government plans to introduce tax incentives for taking up work in Germany to make Germany more attractive to foreign skilled workers. It is planned that newly immigrated skilled workers can exempt 30, 20, and 10 percent of their gross salary from tax in the first three years. This exemption is intended to apply, with an upper and lower limit, to "top performers" from abroad who receive a tax "recruitment bonus."
The federal government refers to the fact that similar models are also practiced by many other European states to attract urgently needed skilled workers from abroad.
Wagenknecht sees "domestic discrimination"
However, the parliamentary scientific service is of the opinion that this justification is not sufficient. There are "considerable grounds for applying a strict standard of review" - among other things, because taxpayers cannot influence whether they receive the rebate or not, and because taxation is no longer based on financial performance.
The opinion was commissioned by BSW party founder Sahra Wagenknecht. The result is disastrous for Federal Chancellor Olaf Scholz (SPD), Vice-Chancellor Robert Habeck (Greens), and Finance Minister Christian Lindner (FDP), she explained. "A tax advantage for foreigners would be social dynamite!" The idea proves that the federal government has no feel for the mood in the country and is working poorly. "The traffic light must scrap this tax discrimination against locals," Wagenknecht demanded.
The parliament's concern about the tax rebate for foreign skilled workers stems from the potential to unfairly disadvantage long-term German employees. However, if the Constitutional Court's lenient standards are applied, the tax inequality could be justified, requiring only a factual reason for the different taxation.
Despite the Federal Government's argument that similar models are used in Europe to attract skilled workers, the parliamentary scientific service finds insufficient justification for the tax rebate, deeming it a potential source of social unrest and discrimination against domestic workers.
