In an attempt to further promote employee share ownership the Upper House of the German Parliament recently approved new legislation granting tax incentives to employees who acquire shares in the company they work for. The new legislation came into force on 1 April 2009.
The new law will increase the maximum amount that employees can receive per year free of tax and social security contributions from €135 to €360 in the form of direct ownership interests, provided all employees who have at least one year’s service at the time of the offer are entitled to participate in the scheme. The income limit for entitlement to the Government Employee Savings Bonus will also increase from €17,900 to €20,000 for unmarried individuals and from €35,800 to €40,000 for married couples.
As part of its second recovery package aimed at stimulating the German economy, the German Parliament also recently approved raising the threshold at which income tax becomes payable by €170 as of 1 January 2009, with a further increase of €170 with effect from 1 January 2010, giving an increased threshold of €8,004. The measure is intended to increase the net income of workers in lower income brackets.
New legislation has also come into force allowing collectively agreed minimum wage rates to be set across six new sectors, including the security industry, waste disposal and care workers. The construction, cleaning and postal sectors are already covered.