Federal states (Länder) support Germany’s economy
Federal and regional subsidies
The Federal Government and the governments of the federal
states (Länder) support Germany’s economy by providing sub-
sidies. Financial aid and tax reliefs are regarded as subsidies.
– Tax reliefs always have a legal basis and are intended to
reduce the tax burden. Important tax relief measures were
introduced recently to defuse the financial and economic
crisis, with the aim to quickly and effciently remove obstacles
to growth in Germany.
The German Growth Acceleration
Act (Wachstumsbeschleunigungsgesetz) introduced reliefs
pertaining to limitations on loss utilization as specifed in § 8c
Corporate Income Tax Law (KStG) and earnings stripping
rules (§ 4h Income Tax Law (EStG), § 8a KStG), which makes
it more interesting to acquire companies in Germany that are
in need of reorganization in order to “rescue” the company.
Financial aid is granted in addition to tax reliefs and is available
as a subsidy, loan, or debt service assistance, with subsidies
accounting for the lion’s share. The Federal Government grants
loans through financial institutions such as the Kreditanstalt für
Wiederaufbau – KfW.
EU Forecast
euf:ba18f:72/nws-01