Income tax reform 2027: states want different rules for Sunday bonuses
The Bundesrat has issued its opinion on the planned tax reform. It rejects the higher cap for tax-free bonuses and wants loopholes for data centres closed.
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On Friday the Bundesrat delivered its opinion on the federal government's planned income tax reform for 2027. The states reject raising the base-pay cap for tax-free Sunday and public holiday bonuses to 75 euros. Instead, they propose moderately raising the current bonus rates of 50 and 125 per cent respectively. They welcome new trade tax rules for data centres but call for loopholes to be closed consistently.
According to the Bundesrat, the government draft would raise the basic tax-free allowance to 12,564 euros in 2027 and 12,900 euros in 2028. Child benefit is to rise to 267 euros (2027) and 272 euros (2028), and the employee lump-sum allowance to 1,430 euros. The top rate of 45 per cent would apply from 250,000 euros, and a rate of 47 per cent from 280,000 euros.
Craftsmen's services would in future be deductible at only 15 instead of 20 per cent, with the maximum falling from 1,200 to 900 euros. The Bundestag will now decide on the law, after which the Bundesrat will deal with it again. The chamber's next plenary session is on 20 November.