Lindner wants to promote employee participation in start-ups

According to a media report, the Ministry of Finance is planning to significantly increase the tax-free allowance in a key issues paper. The "dry income taxation" is also to be addressed.

Federal Finance Minister Christian Lindner (FDP) apparently wants to reform the laws on employee participation in German start-ups. This emerges from an internal letter about which the Handelsblatt reports. According to the report, the planned changes include an increase in the tax-free allowance for employee share ownership from 1,440 euros to 5,000 euros and a change to dry income taxation.

Previously, employee shareholdings were also taxed if there was no cash inflow. Employees must pay tax on their shares after twelve years at the latest or if they change employer, whether or not there are any gains. In future, however, such employee shareholdings will only be taxable after 20 years. According to Handelsblatt, the paper also states that taxation could be delayed even further. The tax advantages are to apply to companies with up to 500 employees, previously this figure was 250. The turnover threshold is also apparently to be doubled from 50 to 100 million euros, as is the annual balance sheet total from 43 to 86 million euros.

The start-up scene has long been calling for better framework conditions. The Federal Minister of Finance justifies the planned changes mainly with the shortage of skilled workers. According to the Ministry of Economics, there is a shortage of 28,700 trained workers in the IT sector alone. According to the Federal Association of German Start-ups, Germany is at a competitive disadvantage here due to the current tax regulations.

However, it remains to be seen what will happen with Lindner's ideas. During his time as finance minister, Chancellor Scholz was not a friend of tax reforms for start-ups. At the time, he said that employee shareholdings were often a means of not paying employees an appropriate wage. Scholz therefore strictly rejected a reform of dry income taxation. There is still no consensus within the German government.