Germany: Bundesrat refused to approve draft business tax reform bill

On 24 November 2023, the upper house of the German parliament (Bundesrat) declined approval of the “Growth Opportunity Act,” a business tax reform bill previously sanctioned by the lower house on 17 November 2023. Instead, the upper house referred the bill to a conference committee for further discussion and compromise.

The bill covers diverse tax measures, including a climate investment grant and adjustments to net operating loss (NOL) carrybacks, minimum taxation for NOL carryforwards, and interest deduction limitations. The upper house’s reservations focused on the anticipated financial burden on federal states and local municipalities, coupled with dissatisfaction over perceived federal government exclusion of the states from the legislative process. The ongoing resolution process seeks agreement between the chambers, with uncertainty on reaching consensus by the final parliamentary session on 15 December 2023 or the potential continuation of discussions into 2024.

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