In an attempt to attract more foreign qualified specialists to the country, Germany is working on finalising a massive tax reduction.
As part of its so-called “growth initiative”, the German government is planning to partially exempt newly arrived foreign qualified workers from the tax for their first three years of employment in the country, Schengen.News reports.
According to the authorities, tax relief is much needed as Germany is dealing with shortages in various sectors across the country.
Sharing information on Germany’s plans to increase immigration of foreign workers, the Federal Minister of Finance Christian Lindner said that the tax rebate is being created specifically for newly arrived professionals.
Minister Lindner noted that the rebate will only apply in the first three years of employment if the measure is approved and officially enters into force.
In addition to the above-mentioned, the Minister explained that the rebates will vary between 30, 20, and ten per cent.
However, he did not disclose any further information on who will be eligible for a larger tax relief and who will be eligible for a smaller tax relief and what the criteria will be.
We are creating a tax rebate for foreign professionals during their first three years in Germany. There will be rebates of 30 per cent, 20 per cent, and ten per cent for those people who come here as qualified specialists.
The measure needs to be approved before it becomes effective. The authorities said that they intend to make a revision of the move after five years.
The Measure to Offer Rebates to Foreign Workers Has Been Criticised by Opposition & Trade Unionists
While foreign workers have welcomed the facilitation that Germany wants to start applying, opposition politicians and trade unionis have criticised the move.
As Deutsche Welle explains, opposition politicians and trade unionists have said that this is discrimination against domestic workers.
Governing parties have also criticised the country’s plan. Green Party lawmaker Beate Müller-Gemmeke said for Deutsche Welle said that Germant has the principle of equal treatment and that everyone should be treated the same.
She also said that this move would be discriminatory against nationals and those who have entered Germany for work purposes in the past.
From my point of view, it would be a bit of discrimination against nationals if we were to say that those who come from other countries are exempt from paying tax on at least a certain part of their salary.
Federal Minister of Labour Hubertus Heils also criticised the move, saying that instead of this measure, Germany should remove bureaucratic hurdles and accelerate the issuance of visas, among others.
Recent data from the German Economic Institute show that there is currently a shortage of about 573,000 skilled workers in Germany.