(de-news.net) – The German Bundestag has passed the Tax Amendment Act 2025, a comprehensive reform package introducing fiscal relief across several sectors. Approved on Thursday morning with the backing of the governing coalition of Christian Democrats and Social Democrats, the measure faced opposition from the AfD and the Greens, while the Left Party abstained. Designed to ease financial burdens for commuters, restaurant operators, and volunteers, the reform also seeks to modernise elements of the tax code.
Among its central provisions is the permanent reduction of value-added tax on restaurant meals, lowered from 19 to 7 percent as of 1 January 2026. Long demanded by the hospitality industry, this step is expected to stabilise business operations and reduce consumer prices, thereby strengthening restaurants and cafés. Equally significant is the increase in the commuter allowance to 38 cents per kilometre, applicable from the first 20 kilometres, a measure intended to provide lasting relief for long-distance commuters, particularly in rural areas reliant on private transport.
Support for voluntary engagement is also expanded. The allowance for trainers in sports clubs and similar roles will rise to 3,300 euros, while the general honorary allowance will increase to 960 euros. These adjustments aim to acknowledge the social value of voluntary work and encourage broader participation. In addition, e-sports will gain charitable status, enabling associations in this field to benefit from tax privileges comparable to those enjoyed by traditional sports organisations.
Parliamentary negotiations introduced further amendments. Olympic medal bonuses will be exempt from taxation, underscoring the state’s recognition of athletic achievement. Trade union members will be permitted to deduct their membership fees from taxable income, supplementing existing lump sums and work-related expense deductions. At the same time, the maximum deductible amount for donations to political parties will be doubled, a move intended to reinforce political participation and party financing.
Despite the scope of the package, resistance has emerged from the federal states. The Bundesrat, representing state governments, demanded compensation for revenue losses expected to affect states and municipalities. The Federal Government rejected this request, maintaining that the reforms are necessary to stimulate economic activity and civic engagement. As Bundesrat approval remains required, the law’s passage is not assured, and debates over fiscal compensation are likely to dominate upcoming negotiations between federal and state authorities.
