Tax : Deduct up to 50% of the investment costs in advance. Investitionsabzugsbeträge (IAB) allow self-employed people and small business owners to deduct up to 50% of the cost of a planned investment. You can deduct the costs within three years before making the purchase. The benefit of IAB is that it lowers your taxable profit and tax bill. You can use the tax savings to finance your investment. You must fulfill the following conditions to apply for IAB.
Your profit must not exceed €200,000.
The investment must be in movable business equipment.
You should use the equipment for business purposes (at least 90% of the time).
The total of all active IABs per business is capped at €200,000.
Filings must be submitted electronically to the Finanzamt.
NOTE: If you don't invest the sum within the three-year window, the Finanzamt reverses the IAB. This means you must pay all the tax savings back retroactively. Moreover, you pay interest on the unpaid tax. [1]
Health : In our past newsletters, we discussed the health insurance reforms. They are now approved by both the Bundesrat and the Bundestag. You can read about all the reforms here. Here are the changes made at the last moment.
Health insurance companies are no longer required to inform you about increases to additional contributions. This would mean you have to keep an eye on your paycheck. If you see a decrease, the most likely culprit is your health insurance. We will, of course, inform you about any price changes in our newsletter.
Spouse co-insurance passed, but as a 2.5% income-based surcharge instead of a flat €240/month. Exemption age raised to under-12 (not under 7). The reform is delayed to Jan 1, 2028.
Pharmacy co-payments: The €7.50–15 range passed, but automatic annual indexation to wage growth was dropped
Sick pay: The cut was dropped entirely. Partial sick pay passed but as 25/50/75%, not "25/50/fully"
Tobacco/alcohol/sugar tax: Split off into separate Finance Ministry legislation
Homeopathy/screening: Homeopathy cut confirmed (plus a new one — cannabis flowers also dropped). Skin cancer screening was not cut, just sent for review.
Bürgergeld cost shift: The full €12bn shift did not happen. It is replaced with a much smaller phased contribution.
AI overviews and asking AI questions are the new way to consume content and get information. At the same time, the AI's answers are as good as the sources it uses.
As you may know, at GermanPedia, we ensure that the information we share is up to date and accurate. Hence, adding GermanPedia as a preferred source on Google ensures that the answers AI gives you are grounded and accurate.
Deadline : The deadline to file the 2025 income tax return (Steuererklärung) in Germany is July 31, 2026. If you use a tax advisor, the deadline extends to March 1, 2027.
Phishing : The following phishing attempts have been reported.
Nothing new here. The same scams are still running, which include DKB, Spotify, Deutsche Bank, Elster, etc.
Product Recall : The following products have been recalled by the manufacturer.
Ja! frozen mixed berries (750 g, best-before 15.03.2028) are recalled because the hepatitis A virus was detected. [1]
For emergencies:
BSI Lagezentrum: +49 228 999582 5110
BaFin Consumer Protection: consumer@bafin.de
Police: 110.
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Ireland and Finland top the list with 20% of the workforce working from home. For Germany, the Home Office Percentage increased by 9% in the last two decades. Read more ->
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AI corner
Launch : SpaceXAI's launched Grok 4.5. It's as good as Opus 4.8, but faster and cheaper. Grok 4.5 is co-trained with Cursor for coding and agentic work.
Launch : OpenAI launchedGPT-Live. This brings us closer to communicating with the AI as we do with other human beings. This opens up a vast range of possibilities. Call centers, interview screening, and more will get a big upgrade. The conversations will feel a lot more natural than robotic.
Learn : Use Fable 5 as a planner and delegate the grunt work to Opus. There are many posts from the community and from Anthropic that share different ways to use Fable 5 to keep costs low. Almost every post suggested using Fable 5 as a planner or an orchestrator, with Fable 5 guiding the agents running on Opus or other models.
Learn : All candidates sound the same on their CVs and during interviews. Yes, using AI to prepare your application is recommended. However, do not let AI overwhelm your personality. Recruiters are receiving hundreds of CVs that all sound the same. These applications get auto-rejected (recruiters are also using AI) and are not even read by the recruiters. The same is happening during the interviews. Candidates are answering the questions in the same way, which, as you may imagine, leads to immediate rejection. Authenticity is becoming even more important in the age of AI. Find your voice and let AI polish it rather than replace it. Here is a great thread on how to stand out.
Latest News
German firms are investing abroad to cut costs. DIHK data show rising plans to invest overseas (especially in Asia) for cost and structural reasons. KfW and Bundesbank figures indicate that the number of medium-sized firms active abroad has reduced.[1]
Iran’s navy says it closed the Strait of Hormuz. They fired on a vessel which was on an “unapproved route.” In response, the US launched a third round of strikes on Iran this week.[2]
Ukraine’s drone strikes on Russian oil refineries have worsened a fuel crisis in Russia. It has led to long gas queues, station closures, and disruptions to daily life across Russia. Kremlin denies a systemic shortage and blames panic buying. Public's frustration and concern over the economy are rising.[3]
Leading business, labor, and political figures are urging Germany to delay its climate-neutrality target from 2045 to 2050. Germany committed to cutting emissions 65% by 2030 and at least 88% by 2040 compared with 1990 levels.[4]
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Community Corner
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