Inheritance tax: Family entrepreneurs and DIHK against higher taxes
Quick Look
- The head of the Family Business Foundation, Rainer Kirchdörfer, and the DIHK President Peter Adrian warn of serious consequences for Germany as a business location if the inheritance tax exemption rules for business assets such as factories, machines or patents were abolished.
- They emphasize that these rules are vitally important to secure jobs and enable investments, and that abolishing them could lead to up to 50 percent tax on the transferred value, which would force many heirs to sell parts of the company.
AI-generated summary
Why It Matters
The discussion about inheritance tax exemption for business assets is part of a larger debate about tax fairness and location attractiveness in Germany, with supporters seeing the regulation as necessary for the preservation of family businesses and critics criticizing it as a tax privilege.
The head of the Family Business Foundation, Rainer Kirchdörfer, has warned of a catastrophe for Germany as a business location if the inheritance tax exemption rules for company heirs are no longer applicable. These protection rules for business assets such as factories, machines or patents are “existentially important” for family businesses, Kirchdörfer told the “Rheinische Post”. They served “to ensure that family businesses can survive for generations.” If these rules were eliminated, “it would be a catastrophe for Germany as a business location.”
Foreign countries envy Germany for its great diversity of small, medium-sized and large family businesses. "Higher inheritance taxes on business assets would mean that family businesses would have fewer funds available for investments." This would also cost jobs. “It is crucial to maintain the protection rules for business assets.”
DIHK boss Peter Adrian also defended the exemption rules for inheritance tax against criticism and warned of significant consequences if the situation worsened. “Behind every family business there are people, employees, trainees and often entire regions who live from this business.” Anyone who wants to protect them must “continue to spare the productive business assets from inheritance tax,” Adrian told the “Rheinische Post”.
It's not about privileges. “The exemption is not a subsidy, but is subject to fixed requirements such as the continuation of operations or the preservation of jobs,” emphasized the President of the German Chamber of Commerce and Industry (DIHK). Business assets are usually tied up in the company and are not available to successors as money. "It's in machines, halls and innovations." An additional tax burden therefore "directly affects the company's ability to invest and compete."
If there is no exemption, according to Adrian, up to 50 percent of the transferred value could be due as tax. "Then many heirs only have to sell parts of the business or the entire business in order to be able to pay this tax." The DIHK's own figures show how tense the situation is anyway.
What to Watch
AI outlook — possibilities, not facts
If the inheritance tax exemption for business assets is no longer available, more sales of parts of companies or entire family businesses are expected.
Likely · Within months
Open Questions
- What specific alternatives to the current exemption regulation are being discussed?
- How high would the expected tax revenue be if the exemption were eliminated?
- Are there international comparisons of how other countries deal with inheritance tax on business assets?
