Enhancing Job Opportunities within the EU: Proposed Expansion by the Commission
The 2025 German federal election is approaching, and the major Bundestag parties have revealed their tax policy proposals, each reflecting their unique economic approaches.
CDU/CSU (Christian Democratic Union/Christian Social Union) emphasise fiscal conservatism, ruling out new company taxes or EU joint borrowing mechanisms, favouring stability and opposing EU-level taxes on corporations as stated by Chancellor Friedrich Merz[1]. The party also proposes the full abolition of the solidarity surcharge.
SPD (Social Democratic Party), traditionally centre-left, support progressive reforms. They propose lowering the value-added tax on food from 7% to 5%, an "active pension" that exempts income of up to 2,000 euros per month, and a recalculation of the cyclical component[2].
Alliance 90/The Greens prioritise environmental taxes and reforms aimed at sustainability. They support enhanced excise duties and adjustments to emissions trading but also focus on digitalization and transparency in tax collection mechanisms[3].
FDP (Free Democratic Party), economically liberal, advocate tax simplification and digital modernization. They propose the abolition of motor vehicle tax in the medium term, making equity capital tax-deductible, and introducing a reduced VAT on electricity[2].
AfD (Alternative for Germany) generally oppose increased taxation and EU tax harmonization, favouring national sovereignty on fiscal matters. Specific detailed tax policy proposals by AfD for 2025 are less prominently reported but are consistent with their anti-EU and anti-tax increase stance[4]. They propose a reduced VAT rate of 7% for daily childcare needs and the introduction of a family splitting system.
BSW (Bündnis Sahra Wagenknecht), a newer party with a left-wing populist platform, focuses on social justice. They likely advocate for higher taxation on wealth and corporations, though detailed 2025 tax proposals remain less publicly codified[5]. They propose the exemption of the first 2,000 euros per month from social security contributions.
Additional context:
- The German government is advancing to implement a mandatory B2B e-invoicing system starting 2025 to improve VAT fraud detection and reporting[^2].
- European Commission plans for 2028-2034 include new own resources such as a corporate tax on large companies, tobacco excise duty, and environmental levies, which may indirectly influence German tax discussions[3].
- The 2025 Income-tax Act simplification initiative in Germany does not change tax rates but improves clarity and accessibility of tax rules, reflecting a general policy trend toward administrative efficiency[4].
The SPD, Greens, BSW, and the Left have very concrete ideas for the minimum wage: 15 euros per hour. The AfD plans to introduce a reduced VAT rate of 7% for daily childcare needs, while the Union plans to increase the commuter allowance and reduce corporate taxes to 25%.
[^1]: CDU/CSU opposition to company taxes in EU budget context dated July 2025 [^2]: Coalition proposals supporting digital B2B invoicing and VAT fraud prevention from July 2025 [^3]: EU budget proposals including new corporate and environmental taxes potentially influencing Germany [^4]: Income-tax Bill, 2025 aimed at simplification without altering rates or policies [^5]: BSW's focus on social justice and likely advocacy for increased wealth and corporate taxation, though detailed proposals are less available.
- In the approaching 2025 German federal election, the major Bundestag parties have revealed their tax policy proposals, with each party advocating for distinct economic approaches.
- The CDU/CSU, known for fiscal conservatism, have stated their opposition to new company taxes and EU joint borrowing mechanisms, instead prioritizing stability and opposing EU-level taxes on corporations.
- On the other hand, the SPD, traditionally centre-left, have proposed lowering the value-added tax on food and introducing an "active pension" to provide economic reforms.
