FDP on finance and taxes

The FDP wants to restructure income tax so that extra work pays off more. The rate schedule would rise evenly, the top rate would apply only at much higher incomes, and the solidarity surcharge would be abolished entirely.

The FDP wants people to pay less tax on their wages. The highest tax rate should start only at 96,600 euros a year. The solidarity surcharge should end. Work should pay off more.

The basic tax-free allowance would rise in steps by at least 1,000 euros alongside the Bürgergeld (citizen's income) reform. The top rate would be tied to the pension insurance contribution ceiling and so apply from 96,600 euros instead of about 68,000. Overtime premiums for full-time workers would be exempt from wage tax. Allowances and bracket thresholds would track inflation automatically, as would inheritance and gift tax allowances. The FDP rejects any wealth tax or wealth levy; childcare costs and maintenance payments would be more deductible.

The FDP wants to bring the corporate tax burden below 25 percent and replace the trade tax (Gewerbesteuer) with a different model. Small and medium-sized firms and restaurants would get additional relief. The program cites international competition as the reason.

Companies should pay less tax. The tax burden should fall below 25 percent. The trade tax should be replaced by another solution. Food in restaurants should be taxed at only 7 percent.

Corporate income tax would be cut and the solidarity surcharge dropped. Add-back rules would go, notional interest on equity would become deductible, loss carryforward would be unlimited and loss carryback expanded. Smaller firms would get wider access to cash-basis VAT accounting, simpler profit calculation, an optional flat-rate expense deduction and higher limits for immediate and pooled write-offs. A uniform 7 percent VAT rate would apply to food, whether eaten in or taken out. Inheritance and gift tax allowances would rise with inflation.

The FDP wants a more digital tax administration and a largely automated tax return for many people. It also wants tougher action against tax fraud, financial crime and undeclared work.

The tax return should become easier. The tax office should fill it in ahead of time for many people. Citizens should have to give their data only once. The FDP also wants to do more against tax fraud.

Under the once-only principle, citizens and firms would give the state a piece of information just one time. A withholding tax on pensions would help make automatic assessment possible. A per-workday flat rate would replace the rules on home offices, remote work and the commuter allowance. New structures would be built against financial crime, and customs, especially local customs offices, would be strengthened. Imports sold via large online platforms would have to be properly cleared and taxed.

The FDP wants to ease taxes on private wealth-building through stocks and channel more private capital into start-ups. Its stated aim is to turn Germany from a country of savers into one of shareholders.

The FDP wants more people to put money into stocks. Gains from stocks should be taxed less. Students should learn more about money. Young companies should get money from investors more easily.

The savers' allowance would get a one-time significant increase, grow over time and be transferable to later years. A holding period after which securities gains are tax-free would return, and the limit on offsetting losses under the flat-rate withholding tax would go. The FDP rejects a financial transaction tax; purchase costs for rental property would be deductible immediately. Insurers and pension funds would be allowed to invest more in stocks and venture capital. A national financial education strategy could include a nationwide compulsory school subject.

The FDP wants financial market regulation to focus more on competitiveness and is critical of a common European deposit insurance scheme. It sees a threat to the protection schemes of savings banks and cooperative banks.

The FDP wants to check and simplify rules for banks. It is critical of a shared European protection for savings. It fears harm for savings banks and cooperative banks. The supervisor should also promote the financial center.

BaFin, the financial supervisor, would also be tasked with promoting the financial center to support fintech and crypto innovation. Existing rules would be checked for proportionality and should not exceed European minimum standards. The European resolution fund should not back national deposit insurance schemes. The preferential treatment of government bonds in bank and insurance regulation would be phased out. The FDP wants to deepen the banking and capital markets union.

The FDP welcomes cryptocurrencies and wants crypto ETFs to be permitted. At the same time it wants to keep cash and accept a digital euro only as a voluntary supplement that protects privacy.

The FDP likes digital money such as Bitcoin. Central banks should be allowed to hold Bitcoin as a reserve. Cash should stay. Nobody should be forced to use the digital euro.

The FDP is open to the ECB and the Bundesbank holding cryptocurrencies as reserves and sees this as a possible boost to the resilience of the currency system. Alongside cash, it favors wide acceptance of card payments. A digital euro should work both online and offline, come without any obligation to use it, and create no new risks for the financial system.

The FDP wants the federal government and the states to comply with the constitutional debt brake, citing fairness between generations. It strictly rejects giving the EU the power to take on debt.

The FDP wants the state to take on little new debt. The debt brake in the constitution should stay in force. Otherwise children will have to pay the debts later. The EU should not take on debt of its own either.

Budgets are to set priorities so that burdens are not passed to later generations. According to the platform, Germany should remain an anchor of stability in Europe and not put its creditworthiness at risk. The Next Generation EU recovery fund is to remain a one-time exception; the FDP regards further EU debt funds as a breach of law and trust. The EU is to focus on core tasks with European added value.