BDO Analyzes Commercial Accounting Impact of "Growth Booster Law"

BDO AG Wirtschaftsprüfungsgesellschaft, a prominent accounting and advisory firm, has published an in-depth analysis of Germany's "Growth Booster Law" (Wachstumsbooster-Gesetz), which was enacted on July 19, 2025. The law contains several tax provisions with direct implications for how companies report their financial performance.

The legislation introduces an "investment booster" allowing for accelerated depreciation of tangible fixed assets acquired or manufactured between July 1, 2025, and December 31, 2027. The maximum annual depreciation rate can be up to three times the linear rate, capped at 30% per year. Additionally, the corporate income tax rate will be gradually reduced from 15% to 10% in five annual steps between 2028 and 2032.

BDO's analysis highlights that while the tax law permits these accelerated depreciation methods, their application in commercial accounting requires that the depreciation reflects the actual pattern of wear and tear of the asset. Companies must carefully assess whether these tax-driven depreciation approaches align with their commercial accounting policies to ensure financial statements remain truthful and not misleading.

Furthermore, the law necessitates adjustments in the accounting for deferred taxes. With the planned reduction in corporate tax rates, companies must re-evaluate their calculations for deferred taxes on temporary differences that are expected to reverse after 2027, applying the new lower tax rates. BDO advises businesses to review their financial statements and tax strategies in light of these changes to ensure compliance and optimize their financial position.