Government negotiations - Tax incentive planned for foreign skilled workers
In their negotiations on the federal budget 2025, Federal Chancellor Olaf Scholz (SPD), Economy Minister Robert Habeck (Greens), and Finance Minister Christian Lindner (FDP) also agreed on measures against the labor shortage. They want to reduce bureaucratic hurdles for the employment of refugees and offer tax relief to foreign specialists in the first years after their entry.
The so-called Growth Initiative of the Federal Government provides that "newly arrived specialized workers can be exempt from income tax for the first three years at a rate of 30, 20, and 10 percent of the gross wage." A lower and upper limit for the gross wage will be defined for this tax exemption. After five years, the effect of these measures should be examined.
To improve the employment of refugees, the Federal Government will introduce a "permission fiction" when issuing a work permit through the Foreigners Office on site. This means that the permit is considered granted if the Foreigners Office, in participation with the Federal Employment Agency, does not communicate anything contradictory to the applicant within two weeks.
Habeck stated that it is about turning the approval competence of the Foreigners Offices around. In the future, it should apply: "If they do not object within 14 days, then the work of foreigners is considered approved."
If more refugees and other foreigners could be integrated into the labor market, it is a "lever for more growth," Habeck emphasized. He often encounters craftsmen who tell him they want to hire someone but fail due to bureaucratic obstacles.
"It's only good news if refugees come to work more quickly," said SPD Interior Politician Hakan Demir. For this reason, the traffic light coalition has already passed reforms. For example, asylum applicants and those waiting for a decision can now work legally after six months instead of nine.
- Under the new measures agreed upon by Olaf Scholz (SPD), Robert Habeck (Greens), and Christian Lindner (FDP), foreign specialists will be eligible for tax relief in their initial years in Germany.
- Christian Lindner, as Finance Minister, played a crucial role in proposing the tax reliefs for foreign specialists within the Growth Initiative of the Federal Government.
- According to Christian Lindner, the tax relief for specialized workers will be exempt from income tax for the first three years at a specific percentage of their gross wage.
- The Federal Government, under the leadership of Olaf Scholz and Robert Habeck, plans to ease the employment of refugees by implementing a "permission fiction" for work permits issued by the Foreigners Office.
- SPD Interior Politician Hakan Demir expressed his support for the coalition's efforts in integrating more refugees and foreigners into the German labor market, stating it as a "lever for more growth."
- Christian Lindner, along with Scholz and Habeck, is part of the German coalition government, known as the "traffic light coalition," which includes the SPD, the Greens, and the FDP, and has already passed reforms to facilitate the employment of refugees and asylum seekers.
