The German government on 5 June 2024 published the draft Annual Tax Act for 2024. The 240-page document introduces a broad range of provisions, including some related to employment taxes.
The Bundesrat, the upper house of Parliament, is expected to provide a statement on the draft in late September 2024.
Christiane Anger
BDO in Germany
The Bundesrat, the upper house of Parliament, is expected to provide a statement on the draft in late September 2024.
Tax deferral for grants of employee shares
Under German law, grants of shares to employees can benefit from tax deferral. The draft law includes a clause that would extend the deferred taxation to grants of shares in the employer’s group compa-nies.Mobility budget
The draft bill introduced a flat-rate tax on “mobility budgets,” which are defined as benefits provided by the employer or by a third party at the employer's direction for the use of mobility services, regard-less of the form of transport. The previously applicable flat-rate taxation regulations would be ex-panded to include the use of mobility options, including, for example, e-scooters, the occasional use of car-sharing, bike-sharing, and other sharing offers and driving services.Gardening leave
The annual tax law 2024 introduces a provision intended to avoid double taxation or nontaxation of wages paid during a leave of absence, or “gardening leave.” Under current law, the remuneration of employees on paid leave who reside abroad is not subject to German tax. The proposed provision adopts the approach of the OECD Model Tax Convention, and provides that, If the relevant double tax treaty does not include an explicit provision on the taxation of wages paid during a leave of absence, that income would be taxed in the country where the activity would have been carried out if not for the leave of absence. Thus, such payments would be taxed in Germany, even if the employee is not physically present during the leave of absence.Christiane Anger
BDO in Germany