BERLIN – Germany’s proposed tax break for foreign workers is facing criticism amid concerns that it might be unfair. The German government has proposed a tax exemption plan for newly arrived skilled workers, offering reductions of 30%, 20%, and 10% on their gross salary over the first three years. This initiative is intended to boost economic growth and address severe shortages of skilled workers by attracting talent from abroad. However, the plan has sparked criticism.
Rainer Dulger, head of Germany’s employers’ association, expressed doubts about the proposed tax incentives, arguing that it undermines tax fairness and could create workplace discord. Dulger warned that such measures might send the wrong political message domestically.
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German Finance Minister Christian Lindner, from the pro-business Free Democrats (FDP), suggested that tax breaks for foreign “top executives” could serve as a “recruitment bonus,” although he acknowledged that employers have been cautious about the idea. Lindner emphasized that the government would engage in dialogue and ensure that any changes would be implemented only if supported by employers.
The German government is also easing visa restrictions for foreign workers amid worsening labor shortages in Europe’s largest economy, which needs around 400,000 immigrants annually to maintain its workforce. The shortage of skilled workers has reached unprecedented levels, impacting the efficiency of German companies. In response, the government has introduced the “opportunity card” (Chancenkarte), which allows foreign workers to enter Germany without a job offer and seek employment upon arrival.
