Co-written by Dr. Joachim H. Borggäfe and Mr Andreas Köster-Böckenförde
A Summary For Foreign Investors
On December 21, 1999, German Chancellor Schroeder and Finance Minister Eichel unveiled the German government's proposal for far-reaching tax reform. The proposal contains some long-expected cuts in personal and corporate income taxes, as well as some unexpected changes, such as the introduction of a German national participation exemption.
The proposal was well received by the German and international business community and led to an all-time high on German stock markets before Christmas. Equity analysts see the proposed reform as a vital step to improving Germany's competitiveness since it should give an important impulse for the modernization and reconstruction of German industry. However, foreign investors should be aware that only DM 8.3 billion (approximately US$4.7 billion) of the total DM 32.5 billion (approximately US$18.3 billion) is earmarked for "true" tax relief,
