The 2027 income-tax reform has reached the cabinet, and the Bundesrat takes up two more tax bills on 25 September 2026. The Deutscher Steuerberaterverband (DStV) legislation tracker of 17 September 2026 puts the Einkommensteuerreformgesetz 2027 (EStRefG 2027) at government-draft stage
Dstv after the cabinet decision of 2 September 2026, following the Bundesfinanzministerium referentenentwurf of 19 August 2026Dstv.
The draft partly implements the coalition committee's tax results of 2 July 2026 and aims to strengthen labour and growth potential long term. Named contents include higher Grund- and KinderfreibeträgeDstv, a higher Kindergeld, and a higher Reichensteuersatz as counter-financing. Specifically, the maximum eligible Grundlohn for tax-favoured Sunday and holiday bonuses rises, the Arbeitnehmer-Pauschbetrag rises, and the income-tax tariff is reformed including exemption of the subsistence minimumDstv. Kindergeld rises from 259 EUR to 267 EUR per month from 2027Dstv and to 272 EUR per month from 2028Dstv. On the other side, the deductible percentage and the maximum relief for Handwerkerleistungen fall, the uniform flat-rate tax for Mini-Jobs rises from 2 percent to 5 percentDstv, and a special Gewerbesteuer apportionment scale for data-centre operators is introduced.
Two bills face their expected first Bundesrat reading on 25 September 2026Dstv with committee recommendations already tabled. The Frühstartrente bill, which starts state-funded capital-covered old-age provision at age six so that small regular contributions compound early regardless of parents' means, carries committee recommendations of 11 September 2026 (BR-Drs. 445/1/26) on the government draft of 14 August 2026 (BR-Drs. 445/26). The Jahressteuergesetz 2026, a collection of mostly technical individual measures, carries committee recommendations of 14 September 2026 (BR-Drs. 447/1/26) on the government draft of the same 14 August date (BR-Drs. 447/26). Its highlighted contents include simplified withholding relief for licence royalties under § 50a Einkommensteuergesetz (EStG) via § 50c EStG, a higher registration threshold under the Forschungszulagengesetz, an adjusted interest rate for full interest under § 233a Abgabenordnung (AO), AI use by tax authorities under § 29c AO, unreduced child allowances and the Ausbildungsfreibetrag for children resident in the EU/EEA, Kindergeld claims of EU/EEA and Swiss nationals, and a recast of the VAT group (Organschaft) under § 2 Umsatzsteuergesetz (UStG).
The no-application Kindergeld bill, which lets the Familienkasse waive the application after a birth and expands data transfers to it under the Once-Only principle, passed the Bundestag in second and third reading on 9 July 2026Dstv after the finance-committee recommendation of 8 July 2026 and now faces its expected second Bundesrat passage on 25 September 2026Dstv. The cash-register duty bill, which introduces the agreed Kassenpflicht from 100,000 EUR total turnover from 1 January 2027 with reporting duties, fines and tax-crime provisions plus hardship relief and an exemption-ordinance authorisation, stands at BMF referentenentwurf and discussion draft for the ordinance, both of 7 August 2026Dstv; the DStV has commented on both. The Ninth Act amending Steuerberatungsgesetz and tax rules, which reprend the ninth amending act the Bundestag passed on 24 April 2026 but the Bundesrat rejected on 8 May 2026 over the Entlastungsprämie — this time without that premium — is promulgatedDstv.
Legal basis: EStRefG 2027 government draft of 2 September 2026; Frühstartrente and JStG 2026 government drafts BR-Drs. 445/26 and 447/26 with committee recommendations BR-Drs. 445/1/26 and 447/1/26; Kindergeld bill BT-Drs. 21/5874; DStV legislation tracker of 17 September 2026.
Prepare payroll and client advice for the EStRefG 2027 measures — Kindergeld 267 EUR from January 2027, 5% Mini-Job flat tax, reduced Handwerker relief — and track the 25 September 2026 Bundesrat readings on Frühstartrente, JStG 2026 and no-application Kindergeld.
