Finance : From 1 July, you'll pay a flat € 3 customs duty on all shipments from outside the EU worth up to €150. Earlier, there was no customs duty. The impact is sharpest on cheap items. A €5 product will cost more than €10 once the €3 duty, shipping, and handling fees are added. A package mixing clothing and electronics incurs €6 in duty (€3 per category). It's a transitional flat rate. It's valid until 1 July 2028. Afterward, product-specific customs tariffs will replace it. The goal is to make the competition fair for EU manufacturers to compete with cheap Chinese products. [1]
Tax : You as a landlord now pay taxes on the renovation costs borne by your tenant (11 K 11216/24, 11 March 2026). The rule applies when a tenant covers costs that are legally the landlord's responsibility. Often, landlords ask tenants to perform renovations and deduct the costs from the base rent. This way, landlords save taxes on their rental income. Not anymore. The tax office considers the renovation expenses paid by the tenant as the landlord's income. This income is recognized when the tenant makes payment to renovation contractors. You (landlord) can deduct the same renovation costs as income-related expenses (Werbungskosten). However, you need proof of the renovation costs. If you can't provide them, the tax office estimates them. [2]
Tax : From 1 July, the aviation tax will be reduced on all flights departing German airports.
Pension : From 1 July, statutory pension rises by 4.24%. The pension value (Rentenwert) increases from €40.79 to €42.52. Read more ->
Sweeping reforms
The CDU/CSU-SPD coalition announced a sweeping reform package on 3 July 2026, titled "A Program for Economic Recovery and Employment". Legislation is expected to pass before the parliamentary summer recess on 10 July.
Taxes
Tax relief for families: From 2027, a family of four with a combined income of €60,000 can expect roughly €600 in annual income tax savings.
The basic allowance (Grundfreibetrag) rises in two stages to €12,900 by 2028. This will anyway increase every year due to inflation.
The employee lump-sum allowance rises by €200 to €1,430 (currently 1230€).
Child benefit increases in two stages to €272/month per child by 2028 (currently €259).
The wealth surcharge (Reichensteuer) kicks in earlier. The 45% rate now applies from €250,000 of income (currently ~€278,000). A new 47% rate applies above €280,000.
Tradesperson deduction cut: Currently, you can deduct 20% of the labor costs from taxes. This will be reduced to 15% of labor costs. And the maximum amount you can deduct drops from €1,200 to €900.
Job
Sick note required from day one: Employers can demand a doctor's certificate (AU) from the first day of illness, not the fourth as under current law. Employers can still opt out of this rule via employment contracts or collective agreements.
Longer fixed-term contracts: Until the end of 2030, employers can hire on fixed-term contracts of up to 48 months without giving a reason. Currently, the fixed-term period is 24 months.
Sunday and holiday bonus threshold rises: The hourly wage limit for tax-free Sunday and public holiday bonuses increases from €50 to €75, from 2027.
If you find this newsletter helpful, consider supporting it. That's what keeps it going. And thank you to those who already support GermanPedia.
Watchout
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.
Post Bank and PayPal -> Scammers are using security checks as a pretext to access your personal details. [1]
Product Recall : The following products have been recalled by the manufacturer.
Holsteiner Katenschinken is recalled due to the presence of Listeria [2]
Raffelberger Medium and Raffelberger Klassik mineral waters are recalled due to bacterial contamination. [3]
For emergencies:
BSI Lagezentrum: +49 228 999582 5110
BaFin Consumer Protection: consumer@bafin.de
Police: 110.
A Request 🙏
Reviews mean everything for online platforms, and GermanPedia is no different.
You can help us compete in Google search by leaving reviews on Google. These really (yes, really) help and are a vital part of Google's discovery and recommendation algorithms.
So, if you find what we are doing helpful, please leave a simple star rating or a short review on Google. This will help more users discover GermanPedia.
North Rhine-Westphalia, Bavaria, and Baden-Württemberg are the top 3 federal states in Germany by the number of people naturalized in 2024. Read more ->
If you have been waiting more than 12 months for your German citizenship application, consider filing a lawsuit to move it forward. We recommend LegalWeg.com.
Need help communicating complex ideas visually? We help you turn data into your most persuasive story. Contact us to learn more.
AI corner
Fabel 5 is available again. Share what you are building and how you are using its capabilities.
Z.ai launched its latest GLM 5.2 model. We encourage you to try different models for different tasks. This will ensure you are prepared when big firms increase the costs of using their frontier models.
Smaller models trained on a specific task outperform frontier models. Mira Murati's Thinking Machines Lab and Bridgewater Associates tested the leading AI models on news-filtering tasks. This includes flagging emails, headlines, and reports relevant to an analyst. GPT, Claude, and Gemini variants averaged around 50% accuracy. Fund-specific prompts lifted scores into the mid-70s. It was still below the 80% threshold Bridgewater says analysts need to trust a tool daily. Training the open-source Qwen3-235B model on expert-graded examples via TML's Tinker platform achieved 84.7% accuracy at a cost 13.8× lower than frontier models. This shows that bigger general-purpose models aren't always the best.
Latest News
Cologne’s Christopher Street Day parade drew more than one million people in a colorful demonstration for LGBTQ rights, diversity, and tolerance.[1]
Wildfires are spreading across several southern European countries. Here are the affected regions: Thessaloniki in Greece, the French Pyrenees, Portugal, and Spain’s Costa Brava.[2]
Ukrainian long-range drones struck oil facilities and other targets near St. Petersburg. The goal is to disrupt Russian energy revenues and military capabilities.[3]
NATO leaders are trying to keep the alliance united at an upcoming Turkey summit. However, Donald Trump’s criticism, possible U.S. troop changes in Europe, disputes over defense spending, and the war in Ukraine all threaten to expose divisions.[4]
Community Corner
Need support with your residence permit or citizenship? Check out LegalWeg*.
New here? Check out GermanPediaDid someone forward you this? Subscribe to this newsletter. Your unfair advantage in Germany Hi all, I am writing this newsletter from India. I landed in Delhi yesterday and am excited to meet family and friends. As you may imagine, I am still tired from the long flight and the heat. So, I will keep this newsletter short. :) Essentials Pension : Germany's pension commission presented a reform package on 23 June 2026. Merz wants to implement all 33 proposals....
New here? Check out GermanPediaDid someone forward you this? Subscribe to this newsletter. Your unfair advantage in Germany I am always seeking to improve the newsletter and share the most valuable information with you. Help me shape this newsletter. Let me know which sections you like and which sections you want us to add -> Essentials Rights : The EU has agreed to reform air passenger rights. Compensation of up to €600 for flight cancellations and delays of three hours or more stays in...
New here? Check out GermanPediaDid someone forward you this? Subscribe to this newsletter. Your unfair advantage in Germany We sent the first newsletter on 23 December 2023. It has now been two and a half years. We are proud to say that we have been sending this newsletter without fail every week. We haven't canceled a single newsletter since Dec 2023. The result We helped thousands of expats navigate life in Germany with confidence. Grew from 0 subscribers to 5800 strong. 175+ 5-star reviews...