German companies are set to receive a tax relief package of around €6 billion ($6.61 billion) per year, ministry sources told Reuters.
According to the sources, Germany’s Ministry of Finance is planning to offer businesses the package to help combat a difficult economic climate that looks increasingly likely to result in recession.
In a tweet on Wednesday, July 12, Finance Minister Christian Lindner said: “The economy needs stimulus – rarely has this been so urgent as now.”
The package, which will include almost 50 tax policy measures, is set to make up part of the Growth Opportunities Act, the sources said.
According to the sources, it will include tax incentives for companies to make environmentally friendly investments and will also provide greater incentives for research.
Germany predicts revenue increase under pillar two
In other news from Germany, the Ministry of Finance reports that the global minimum corporate rate would increase tax revenue by €910 million ($1 billion) in 2026, reported Reuters on Tuesday, July 11.
Large companies operating in Germany with revenues of at least €750 million will have to pay the minimum rate of 15% on worldwide profits. In Germany specifically, this is expected to affect around 800 businesses.
Germany is set to implement the two-pillar solution as part of the country’s support for the OECD reforms, but there is still uncertainty over whether pillar one will succeed globally.
India will impose 28% tax on online gaming
India is set to impose a 28% tax on funds that online gaming companies make from their customers, according to Al Jazeera on Tuesday, July 11.
The Goods and Services Tax Council decided to go ahead with the proposal to tax the online gaming industry as part of efforts to tackle addiction.
Finance Minister Nirmala Sitharaman said that the decision was reached after intense discussion. The Indian government claims that there is no need for further consultation on the proposal.
Gaming companies will likely just pass on the cost of the tax to their customers.
Tax firms leaked private customer data to tech companies
Tax preparation firms shared the private data of tens of millions of customers with tech multinationals including Google and Meta, a US congressional investigation has found.
The findings, which were unearthed by a probe led by Senator Elizabeth Warren, could represent a violation of federal law.
Firms H&R Block, TaxSlayer and TaxAct, among others, have been accused of sending personal data such as people’s names, gross income, phone numbers and email addresses to tech companies so that it could be used for targeted advertising.
The Democratic lawmakers involved in the probe have told the Department of Justice, the Internal Revenue Service and the Federal Trade Commission to “immediately open an investigation” into the tax firms and tech giants.
In a statement to the Associated Press, a Meta spokesperson said its policies clearly state that advertisers “should not send sensitive information about people through our business tools.”
EU carbon border tax has dangerous loophole, say aluminium companies
European aluminium companies have warned that a loophole in the EU’s carbon border tax will allow heavily polluting nations to sidestep the rules and flood the bloc with cheap and environmentally damaging metals.
Under the current Carbon Border Adjustment Mechanism (CBAM) proposal, offcuts of aluminium can be melted down and sold as zero-carbon products, therefore forgoing the levy.
Aluminium companies including Norsk Hydro and Speira told the Financial Times that the loophole incentivises non-EU producers to make as much scrap metal as possible for remelting.
Talking to the FT, CEO of Norsk Hydro, Hilde Merete Aasheim, said: “This loophole enables the widespread greenwashing of imported aluminium products and undermines the effectiveness of CBAM in preventing carbon leakage.”
Brazil moves towards new VAT system
Brazil may be close to a landmark tax reform after lawmakers in the lower house of Congress voted through a proposal to simplify the tax system, according to the FT on Friday, July 7.
The Chamber of Deputies approved the bill to reform the tax system and simplify federal and local taxes with the introduction of VAT. However, the Senate still has to vote on the bill before it becomes law.
The bill would replace a host of different taxes with just two forms of levy: a federal VAT rate and local VAT rates. This would end of the system of taxing goods where they are produced rather than where they are sold. It would also impose a standard rate of 25%.
Businesses will have a transition period – with the new rates coming into force between 2026 and 2032 – if the bill becomes law. It comes just after Brazil has secured a historic transfer pricing reform.
Next week in ITR
ITR will continue to follow the PwC Australia tax leaks scandal and report on any major developments.
Elsewhere, the OECD is set to present its pillar one work to the G20 finance ministers in India on Monday, July 17, and Tuesday, July 18.
Readers can expect these stories and plenty more next week. Don’t miss out on the key developments. Sign up for a free trial to ITR.
