Germany is considering lowering taxes for foreign skilled workers who decide to take up jobs in the country.
These tax rebates will range between 30%, 20%, and 10%.
This comes as an effort to attract more foreign qualified professionals to the country under its “growth initiative” effort by the German government to partially exempt newly arrived foreign qualified workers from taxes for their first three years of employment.
According to authorities, this tax relief is essential as Germany faces shortages in various sectors.
What the Minister said
The Federal Minister of Finance, Christian Lindner noted that the rebate will only apply during the first three years of employment, pending approval and official implementation.
Additionally, the Minister explained that the rebates will range between 30%, 20%, and 10%. However, he did not provide further details on who will be eligible for larger or smaller tax relief and what the specific criteria will be.
According to Lindner,
“We are creating a tax rebate for foreign professionals during their first three years in Germany. There will be rebates of 30%, 20% and 10% 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.”
Criticisms and opposition
While foreign workers have welcomed Germany’s proposed tax reduction, opposition politicians and trade unionists have criticized the move.
They argue that this policy discriminates against domestic workers.
Governing parties have also voiced their concerns. Green Party lawmaker Beate Müller-Gemmeke said that Germany upholds the principle of equal treatment, and everyone should be treated the same.
She stated that this move would discriminate against nationals and those who have previously entered Germany for work purposes.
“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,” said Müller-Gemmeke.
Federal Minister of Labour Hubertus Heil also criticized the measure, suggesting that instead of this tax exemption, Germany should focus on removing bureaucratic hurdles and accelerating the issuance of visas, among other solutions.
As earlier reported, recent data from the German Economic Institute indicates that there is currently a shortage of about 573,000 skilled workers in Germany.
If the tax rebate becomes effective, this could further position Germany as a top destination for foreign skilled workers.
