On Wednesday, September 14, 2016, the German Federal Government passed a new bill: additional tax incentives are intended to strengthen the involvement of investors in startups.
Investors who invest venture capital in young technology companies should in future be able to claim accumulated losses from the tax authorities.
For reasons of EU state aid law, the planned loss offset option should not only apply exclusively to venture capital, but generally when investors invest in a struggling company, continue to operate it and thus preserve jobs.
Better access to venture capital from investors
Finance Minister Wolfgang Schäuble said that the improved framework would make it even easier for companies to attract investors for innovative business models. Economics Minister Sigmar Gabriel added that the new law would give companies better access to private venture capital, which they urgently need for their growth.
According to current estimates, the subsidy could cost the state up to 600 million euros in lost tax revenue annually. The changes are to take effect retroactively on January 1, 2016.
