Bavaria wants tax breaks for start-ups

The CSU is calling for investments to be tax-deductible for an unlimited period.

Bavaria wants to create incentives to promote start-ups. "Especially after the corona crisis, we need start-ups to get off to an innovative start. The creative minds need capital for this," Bavaria's Finance Minister Albert Füracker (CSU) told the German Press Agency in Munich. Venture capitalists should be able to write off their investments against tax immediately and to an unlimited extent. "In this way, we are shifting a significant part of the financial risk." Profits made by private investors should be tax-privileged if they are reinvested.

The German government's planned Fund Location Act, which is intended to strengthen Germany as a location for start-ups, does not go far enough for the Bavarian CSU politician. The limit of the tax-free allowance should - according to the demand from Munich - be increased from the current 300 euros to 3,000 euros. "This increases the chance that highly qualified employees will commit even more to a start-up, even if high salaries are not yet being paid," Füracker told dpa.

Baden-Württemberg has also proposed tax relief for start-ups and intends to submit the idea to the Bundesrat this month(Startbase reported). Baden-Württemberg is calling for start-ups to be able to offset their losses from the first six years against later profits for tax purposes. Profits from investors should also remain tax-free up to five million euros if they are reinvested in a start-up.