Lindner wants to promote employee participation in start-ups

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

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

Up to now, employee shares have also been taxed if there is no cash inflow. Employees have to pay tax on their shares after twelve years at the latest or when they change employer, whether profits accrue or not. In the future, however, taxes will only be due on such employee shareholdings 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 sales 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.

Better framework conditions have long been demanded by the start-up scene. 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. The current tax regulations put Germany at a competitive disadvantage here, says the German Start-ups Association.

However, it remains to be seen how Lindner's deliberations will proceed. Chancellor Scholz did not show himself to be a friend of tax reforms for startups during his time as finance minister. Employee shareholdings were often also a means of not paying employees adequate wages, it was said at the time. Scholz therefore strictly rejected a reform of the dry-income taxation. There is not yet a consensus within the German government.