East-based Business Families Press for Implementation of Inheritance Taxes
In a move that could shake up Germany's tax landscape, Bavarian Minister-President Markus Söder (CSU) has proposed regionalizing inheritance tax. This proposal, if implemented, would potentially create a patchwork of different inheritance tax regulations across Germany.
Söder's proposal is compared to Austria, which has no inheritance tax, creating a competitive disadvantage for border region companies. The competitive disadvantage for border region companies is a key concern in the discussion about regionalizing inheritance tax.
Marie-Christine Ostermann, President of the Association of Family Entrepreneurs, views Söder's proposal skeptically due to concerns about a patchwork of regulations. Ostermann believes that a complete abolition of inheritance tax in the eastern states would greatly improve the ability of companies to strengthen their equity capital.
The Social Association of Germany (Sozialverband Deutschland, Sozialverband VdK) is currently demanding the abolition of inheritance tax for family businesses and craft enterprises in the eastern federal states of Germany. Their criticism of Söder's proposal includes concerns that regional differentiation could lead to financial disadvantages and undermine the principle of tax equity across Germany. They argue that instead of regionalizing, the inheritance tax should be entirely abolished for these businesses in the eastern states to support economic growth and secure jobs there.
Thuringia's Minister-President Mario Voigt (CDU) described Ostermann's proposal as an "interesting proposal". Voigt stated that if they want to strengthen the east, they must give it this chance, implying support for the abolition of inheritance tax.
However, Friedrich Merz (CDU), Federal Chancellor, has rejected Söder's proposal. Merz does not see a consensus between the states on regionalizing inheritance tax at the moment. This rejection indicates a lack of agreement among the states on regionalizing inheritance tax.
Ostermann explains Söder's proposal from a Bavarian perspective as understandable due to the competitive disadvantage for border region companies. She advocates for the abolition of inheritance tax for businesses in the eastern German states, arguing that it would be a real tax cut for Small and Medium Enterprises (SMEs) and crafts in eastern Germany.
In conclusion, the proposal to regionalize inheritance tax in Germany is a contentious issue, with proponents arguing for economic growth and job security in the eastern states, and opponents raising concerns about tax equity and a potential patchwork of regulations. The debate is far from over, and it remains to be seen whether Söder's proposal will gain traction among the states.
