Germany introduces a 30% super depreciation to boost investments. Between July 1, 2025 and December 31, 2027, companies can immediately claim 30% of their investments in movable assets for tax purposes in the first year. The goal is to stimulate the economy, foster innovation, and support companies with high capital expenditures (CAPEX), echoing approaches recommended by international organizations like the OECD and reflecting global trends in using accelerated depreciation to drive economic growth.
Who benefits? Especially companies with CAPEX-intensive business models such as Siemens, Volkswagen, or SAP, which regularly invest in machinery, equipment, or digital technologies. These firms are well-positioned to leverage the tax incentive, much like their counterparts in other advanced economies that have adopted similar measures to spur modernization and competitiveness.
Important: The limited timeframe requires quick and strategic action to make the most of the tax benefits. According to Deloitte, companies that proactively plan for such temporary incentives often realize the greatest financial and operational advantages.
The 30% super depreciation is a tax instrument that allows companies to write off 30% of investment costs for movable assets in the first year—instead of the usual straight-line depreciation. This method enables companies to claim larger tax deductions in the early years of their investments. The aim is to accelerate investments in economic transformation, a strategy shown to positively impact GDP growth and productivity, as highlighted by the World Bank and other economic research institutions.
Federal Finance Minister Lars Klingbeil emphasized the importance of this measure with the words:
"With our growth booster, we are now jumpstarting the economy. This secures jobs and puts Germany back on a growth path."
The following explains which investments benefit from this regulation and how companies can apply it strategically.
The regulation applies exclusively to movable fixed assets. This includes, among others:
Real estate and buildings, on the other hand, are not eligible. Particularly attractive is the additional incentive for e-mobility: Here, companies can even write off 75% of investment costs in the first year. In addition, the price cap for e-vehicles has been raised, making this option even more appealing. According to IEA data, such incentives have been instrumental in accelerating electric vehicle adoption in several countries.
The focus is also on investments in green and digital technologies. Companies investing in sustainability, automation, or digitalization benefit the most. Typical examples include: production machinery, IT systems, electric vehicles, or equipment to improve energy efficiency. These priorities align with the UN Sustainable Development Goals and the EU’s Green Deal objectives.
The 30% super depreciation is time-limited. It applies to investments made between July 1, 2025 and December 31, 2027. This limitation provides companies with a clear incentive to plan their investments early, as they can only benefit from the tax advantages within this window. Similar time-bound incentives in the US and UK have led to significant surges in capital investment during their effective periods (Brookings Institution).
Finance Minister Klingbeil emphasized:
"This gives the economy the urgently needed planning security and creates strong investment incentives."
For companies, this means: Strategic action is required. Those who invest early can reap the benefits over several years.
An example illustrates the benefits: Instead of depreciating a machine worth €100,000 over ten years on a straight-line basis, companies can write off €30,000 in the first year. With a tax rate of 30%, this results in a tax saving of around €9,000. This additional liquidity can be used directly for further investments or company financing.
Studies show that temporary tax incentives like this can increase GDP by around 0.3 percentage points (IMF). Companies with high investment spending benefit disproportionately. For example, a mechanical engineering company investing €1 million in new production equipment could write off €300,000 in the first year, saving around €90,000 in taxes. These savings can, in turn, flow into further growth.
The 30% super depreciation has its greatest impact on companies with high investment spending. These companies benefit from immediate financial advantages that not only improve liquidity but also enable faster payback and modernization. Let’s take a closer look at the benefits.
With accelerated depreciation, taxable income drops significantly in the first years. The result? Tax savings that immediately boost liquidity and free up resources for new investments. According to PwC, such liquidity effects are especially valuable for companies navigating uncertain economic conditions.
Here’s a clear example: A mechanical engineering company invests €500,000 in new equipment and writes off €150,000 in the first year. With a tax rate of 30%, the company saves €45,000 in taxes. This amount is immediately available for further investments—a real advantage for staying flexible and competitive.
The tax savings generated by the 30% super depreciation significantly shorten the payback period. Companies can refinance their investments more quickly and strengthen their financial stability.
Austin Ramirez, an entrepreneur from Wisconsin, describes this advantage as follows:
“Accelerated depreciation gives me more liquidity, more capital for immediate investments, and improves the return on my projects. With accelerated depreciation, I make bigger and faster investments.”
This accelerated financing process not only improves the balance sheet but also lays the foundation for further modernization. Especially for companies that regularly invest in new technologies, this is a key competitive advantage.
The 30% super depreciation motivates companies to modernize their equipment. Especially in the area of strategic ESG investments (environmental, social, governance), tax savings can be used to invest in modern technologies and infrastructures—without putting too much strain on liquidity. Research from McKinsey shows that companies investing in sustainability and digitalization often outperform peers over the long term.
Since the measure is limited until the end of 2027, there is an additional incentive to implement modernization and technology upgrades within this period. Companies focusing on green technologies can benefit twice: Combining the 30% super depreciation with funding programs for sustainable investments significantly increases the overall return on such projects.
The result? A modernized infrastructure that not only reduces the ecological footprint but also secures long-term competitiveness.
The 30% super depreciation does not affect all economic sectors equally. Some industries benefit particularly strongly, especially those that regularly make large investments in machinery, equipment, and digital technologies. Here’s an overview of the sectors that benefit the most.
For manufacturing and industrial companies, the 30% super depreciation is a significant incentive. These companies continuously invest in new machinery, production equipment, and assembly lines—exactly the kind of investments covered by this tax measure.
The tax benefits significantly reduce capital costs. Studies show that bonus depreciation significantly boosts investments in qualifying assets (NBER). This leads to faster investment cycles and strengthens competitiveness. In addition to traditional industrial companies, technology-oriented firms also benefit from these incentives.
Technology companies that regularly invest in hardware, servers, and digital infrastructure can noticeably reduce their costs through the 30% super depreciation. This makes the measure particularly attractive for this sector.
Tax incentives effectively lower the costs of research and development (R&D) and promote investments in new technologies. A study in nine OECD countries shows that a 10% reduction in R&D costs through tax incentives leads to a 1% short-term and almost 10% long-term increase in R&D spending (OECD).
For technology companies, it is advisable to plan investments strategically. This includes careful documentation of R&D projects such as software development, prototyping, and system improvements to ensure eligibility for tax credits. It is also important to identify investments in digital infrastructure such as data centers and servers to fully leverage the super depreciation. In addition, companies investing in sustainable technologies also benefit from these incentives.
The 30% super depreciation offers special advantages for companies investing in environmentally friendly technologies and ESG-compliant projects. By reducing investment costs, sustainable technologies become more attractive. This approach is consistent with global efforts to accelerate the green transition, as outlined by the International Energy Agency.
One example is Makersite, a startup that helps manufacturers create digital twins of their products and assess the sustainability of their supply chains. The company recently closed a Series A funding round of €18 million.
Toshiya Otani, Managing Director at TransLink Capital, describes the importance of such technologies:
“Many manufacturers are under customer and regulatory pressure to reduce their carbon emissions. Makersite is one of the few platforms that enables manufacturers to analyze at the SKU (Stock Keeping Unit) level, without the heavy manual work that is usually required.”
Nick de la Forge, co-founder and partner at Planet A Ventures, adds:
“We are witnessing an unprecedented unification of all industries with the goal of decarbonizing and detoxifying our supply chains. Makersite technology enables companies to gain the granular product insights necessary for a sustainable transformation.”
Companies investing in sustainable technologies or ESG-compliant projects can thus not only achieve their environmental goals but also benefit from the tax advantages of the super depreciation. For further reading, see the BBC's coverage of Europe's green transition.
While the 30% super depreciation offers clear advantages, it also brings some challenges that companies must consider in their investment planning. The following section takes a closer look at these aspects.
The limitation of the 30% super depreciation until 2027 puts companies under considerable time pressure. The restricted period may lead to rushed investment decisions, potentially causing long-term growth strategies to be neglected. Tobias Hentze, tax expert at the German Economic Institute Cologne, aptly describes the situation:
“Declining-balance depreciation works because it creates targeted incentives for earlier and higher investments. But: It remains a temporary effect.”
Projects requiring long planning and implementation periods are under additional pressure. Companies must make quick decisions, which is not always compatible with sustainable strategies. The Kiel Institute notes that such time-limited incentives can create investment spikes but may not always lead to sustained growth.
Another limiting factor is the dependence on taxable profits. Companies in loss phases, such as startups or those undergoing restructuring, cannot benefit from this measure. Even with fluctuating profits, there is a risk that the full depreciation benefit cannot be utilized. This weakens the actual purpose of the measure—to stimulate investments. As Tax Foundation analysis shows, the effectiveness of accelerated depreciation is greatest for profitable firms.
The effectiveness of the 30% super depreciation also depends heavily on the general economic environment. Robin Winkler, economist at Deutsche Bank, points out:
“Its impact on facilitating the broader structural transformation of the German economy is likely to be limited.”
High energy prices, trade conflicts, rising borrowing costs, and international uncertainties pose significant obstacles. Even tax incentives cannot fully offset these structural problems. Added to this are uncertainties about future regulations, which further dampen investment willingness. For long-term investments, companies need a stable and predictable business environment, which is currently often lacking. For more on these macroeconomic challenges, see Financial Times.
The 30% super depreciation offers CAPEX-intensive companies a real opportunity to accelerate investments and secure liquidity in the short term. But the limited timeframe until 2027 makes one thing clear: Fast and strategic action is a must. Only those who plan smartly now can fully exploit the benefits of this measure.
An example from the industry shows how effective a well-thought-out strategy can be: An early-planned production facility was able to increase its capacity by 20% within just six months. As Duarte DoRego from CORE explains:
“Operational readiness (OR) is not simply about flipping a switch and starting operations. It's about ensuring people, systems, equipment, and organizational culture are fully prepared to operate and maintain an asset safely, efficiently, and effectively from day one.”
For executives, this means: Now is the right time to take action. A thorough assessment of the financial and operational starting point is crucial to make the most of this temporary measure. Companies that hesitate risk not only losing tax benefits but also missing out on technological upgrades and modernization—and thus important competitive advantages.
Working with tax advisors is essential to optimize the financial effects. Equally important is developing a clearly prioritized investment strategy. Only through decisive action can companies use the 30% super depreciation as a powerful driver for growth and innovation—and thus secure their future in the long term. For more guidance, see EY's investment incentive insights.
To get the most out of the 30% super depreciation, companies should carefully design their investment plans for 2025 to 2027. The key is to identify eligible projects early on—especially those focusing on digital transformation or sustainable technologies. A detailed financial analysis is essential to realistically assess costs, expected cash flows, and tax benefits. As Deloitte notes, early engagement with tax professionals and scenario planning can maximize the value of such incentives.
Ensuring sufficient liquidity also plays a crucial role. Only then can planned investments be implemented smoothly. Ongoing monitoring of investments and their outcomes helps to make timely adjustments and ensure that long-term benefits are fully realized. In this way, companies can not only reduce their tax burden but also strengthen their competitive position.
The 30% super depreciation, which applies to investments made between July 1, 2025 and January 1, 2028, offers companies an attractive opportunity to invest in sustainable technologies. With this regulation, companies can significantly reduce their tax burden in the early years by depreciating the costs of certain investments more quickly. This frees up valuable liquidity that can be used for further projects, supporting the transition to a climate-friendly economy and aligning with the EU’s Fit for 55 and Green Deal targets.
The focus is especially on investments in green technologies such as renewable energy, energy-efficient equipment, or environmentally friendly production processes. These measures not only create financial incentives but also promote the transition to a sustainable economy, as highlighted by the IEA Net Zero by 2050 report.
In addition, the transition to a climate-friendly economy is supported by additional funding programs, for example in the field of electromobility. These tax benefits not only strengthen the competitiveness of companies but also actively contribute to achieving climate goals. Thus, the super depreciation makes an important contribution to sustainable development and economic progress in Germany.
The 30% super depreciation undoubtedly offers advantages for companies, but it also comes with some challenges. One of the biggest hurdles is ensuring the necessary liquidity to make the required investments in the first place. Especially in economically challenging times when production costs are rising, this quickly becomes a real burden. According to OECD research, access to financing and cash flow management are critical for companies to fully benefit from accelerated depreciation schemes.
How can companies overcome these difficulties? One option is to actively seek strategic financing options. These could include partnerships with investors or the use of government funding programs. Thorough and forward-looking planning also helps to make the most of the tax benefits of the super depreciation.
In addition, efficiency improvements and optimization of internal processes can create a positive environment for investments. Such measures not only facilitate the implementation of depreciation but also strengthen the company's financial stability. The key is a proactive approach—those who act early can benefit from this tax measure in the long term.