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Young companies in Germany have difficulties with their financing. The country now wants to help them get money in the initial phase.
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Stuttgart – Start-up companies that invest a lot of their money in research should, according to the state government, receive better tax subsidies. This emerges from a cabinet proposal from the Ministry of Finance, which our newspaper has received and which is to be approved by the Council of Ministers on Tuesday. Accordingly, with a Federal Council initiative, the state wants to ensure that such companies can set off losses from the first six years after their establishment against later profits.
CDU: Against bureaucratic obstacles
An improvement in the tax framework is important because “young, innovative companies in particular often have to struggle with financial problems in their founding phase,” said the economic policy spokesman for the CDU parliamentary group in the state parliament, Claus Paal, to our newspaper. “As a young start-up entrepreneur, you should just be able to tackle your idea and get started – without major bureaucratic obstacles.”
The country also wants to ensure that Germany improves the tax conditions for investors in young, innovative companies. The aim is to make it easier for investors to enter such a company on a larger scale without jeopardizing the company’s loss carryforwards due to the change in ownership.
Advantages for investors too
The state also wants investors to be able to take profits tax-free when leaving a start-up company in order to invest the funds in another start-up company. Accordingly, profits of up to five million euros should remain tax-free if the money invested is transferred from one young, innovative company to another.
After the bill has been approved, the state government intends to introduce the plans to the Federal Council in mid-February.
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