Family entrepreneurs call for an end to inheritance tax in the East

The President of the Association of Family Entrepreneurs, Marie-Christine Ostermann, is calling for the abolition of inheritance tax for businesses in the eastern German states. Until the fall of the Berlin Wall, companies there were systematically disadvantaged when it came to building up equity capital, she told the Funke Mediengruppe newspapers, explaining the reasons for this.

"A complete abolition in the eastern German states would greatly improve the opportunity for companies there, from family businesses to craft enterprises, to strengthen their equity capital," said Ostermann. However, the entrepreneur is sceptical about the proposal by Bavarian Minister President Markus Söder (CSU) to regionalize inheritance tax so that each federal state could set its own tax rates.

Merz rejects special approach to inheritance tax

Regionalization with 16 different regulations would result in a patchwork of different regulations and composite allowances, she said. The bureaucratic burden would increase enormously for companies with permanent establishments in several federal states.

From a Bavarian perspective, however, Söder's proposal is understandable, explained Ostermann. "Especially in comparison to Austria, where there is no inheritance tax, there is a considerable competitive disadvantage for companies in border regions."

Federal Chancellor Friedrich Merz (CDU) has already rejected Söder's proposal. "At the moment, I don't see that there would be a consensus between the federal states on this," he said on Monday.