Klingbeil Announces Tax Relief for Startups in Eastern Germany

Tax Simplifications for Young Companies

A central element of the package is the tax treatment of employee participations. Startups have complained for years that the taxation of virtual stock options at the time they are granted further constrains the already tight financial leeway of young employees. In the future, a later point of taxation is to apply here, once income is actually realized or shares can be sold.

At the same time, the Finance Ministry plans to extend the tax loss carryforward for young companies and to align it with the life cycles of typical startup phases. This is intended to support precisely those firms that have to post high initial losses before they scale. Industry associations had repeatedly called for exactly these points in recent months.

More Incentives for Investment in Startups

With regard to the capital side, Klingbeil announced that investments in startups would in the future be made more attractive from a tax perspective. Planned measures include an improvement of conditions for business angels as well as an expansion of loss offsetting at the fund level. The aim is to channel more private capital into technology-oriented startups, particularly in areas such as artificial intelligence, green technologies, and industrial 3D printing processes.

Within the framework of the "Ost" industry dialogue, Klingbeil emphasized that the new rules should benefit not only Berlin but the entire republic. The eastern German states had a dense research landscape and well-trained specialists, but suffered from a comparatively thin venture capital structure. Here, he said, the state wanted to counter this with targeted incentives.

Reactions from the Startup Scene

The reactions from the startup scene are cautiously positive. During the event, the rising insolvency figures were pointed out repeatedly, but at the same time it was emphasized that the number of new business formations had risen unexpectedly over the past twelve months. The relief package is intended to safeguard this dynamism and translate it into sustainable growth.

Klingbeil made clear that the package is part of a broader startup strategy of the federal government. In addition to tax relief, this also includes investments in defense and security startups, the expansion of transfer structures between research and industry, and closer integration with European funding programs. The federal government plans to coordinate the measures across ministries in the coming weeks.

Next Steps in the Legislative Process

The federal government announced that initial key points of the package are to go into interministerial coordination still this month. According to the Finance Ministry, cabinet deliberations are planned for autumn 2026. This would allow the project to enter into force still within this legislative term.