Cabinet Approves 2026 Tax Law; Digital Filing Deadline Looms
Germany's cabinet approved the Jahressteuergesetz 2026 on August 12, pushing digital tax filing by default and raising income thresholds for royalty payments. Most provisions take effect January 2027.
On August 12, 2026, Germany's Federal Cabinet (Bundeskabinett) approved the 2026 Annual Tax Act (Jahressteuergesetz 2026), a legislative package bundling smaller tax reforms for employees, freelancers, and businesses alike. The law still requires approval from the Bundestag and Bundesrat, with final passage expected by year-end.
Key changes affecting individuals and working residents:
Digital Filing Goes Default
- From January 2027, the tax office (Finanzamt) will send all tax assessments through ELSTER (Germany's online tax portal) by default, provided you have an active account
- This accelerates Germany's shift toward digital-first administration and reduces paper correspondence
Simplified Royalty Payments Payment verification thresholds for royalties, licenses, and publishing payments rise tenfold—from €10,000 to €100,000 annually. Below this new ceiling, German companies and freelancers can use a streamlined procedure that skips standard tax office clearance, cutting bureaucratic overhead.
Research Tax Credit Expansion Companies claiming research and development credits (Forschungszulage) now see individual project caps rise to €25 million per year, matching higher EU state-aid thresholds and making R&D investments more attractive.
Property Valuation Changes New rules on dividing property purchase prices between land and building value affect depreciation calculations for real-estate investors and business owners.
Most provisions take effect on January 1, 2027. If you have an active ELSTER account and file regular tax returns, you should expect digital delivery of assessments starting next year. Freelancers and self-employed earning above €100,000 in royalties or licensing should review whether the simplified procedure applies to their business, potentially saving time and reducing filing complexity.
Sources
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