"Useless" and "distant from practice": Criticism of the new law on employee share ownership
On Wednesday, the federal cabinet passed the draft law. Now the criticism from industry representatives is increasing.
The Federal Cabinet has approved the draft of the Fondsstandortgesetz (FoG). This is intended to exempt the management of venture capital funds from VAT in future. The tax allowance for employee shareholdings is then to double to 720 euros. If employees participate in start-ups, the federal government wants to tax the profits only after ten years or in the case of a change of employer. So far, benefits from such participation must be taxed directly.
"Germany will become more attractive and competitive as a fund location," says Federal Finance Minister Olaf Scholz (SPD). "It is important to me that employees can also participate in the success of the companies."
Harsh criticism of the law, however, comes from industry representatives. On Twitter, Christian Miele, president of the Start-up Association, writes: "The proposal by Olaf Scholz will be a pipe burner as it is in the book. Useless. Distant from practice. Simply unsuitable." For him, the proposals do not go far enough. Bitkom President Achim Berg also criticizes the new law. "Too few startups will benefit from it, too many tax risks remain for employees, and the tax allowances are clearly too low and come with too many restrictions," he writes in a statement. Just like Miele, Berg also criticizes the too low tax allowance. "If we want to survive in international competition, we need an allowance of at least 5,000 euros," Berg writes.
The Union announced to sharpen in the Bundestag. "Consultations with those affected suggest that the draft law does not go far enough," writes Antje Tillmann (CDU), financial policy spokeswoman for the CDU/CSU faction. "In the parliamentary process, we will work to ensure that Germany can compete with other locations in regulatory terms." The bill will next be debated in the Bundestag.
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