Germany's finance ministry plans to offer companies a tax relief package of around 6 billion euros ($6.61 billion) per year against the backdrop of a difficult economic environment, ministry sources said.
German business morale has been deteriorating, suggesting that Europe's largest economy will struggle to shake off recession.
"The economy needs stimulus - rarely has this been so urgent as now," finance minister Christian Lindner tweeted on Wednesday.
The tax relief plan will be part of the draft Growth Opportunities Act, which Lindner has proposed to make Germany more competitive as a business location amid a loss of appeal due to high energy prices and burdensome bureaucracy.
The draft legislation includes a total of almost 50 tax policy measures, mainly aimed at small and medium-sized enterprises, the sources said.
There is also a provision to incentivise companies to invest in climate protection.
This will offer companies certain tax benefits between 2024 and 2027 if they make climate friendly investments, the sources said.
Lindner's package also provides stronger tax incentives for research. It also would allow companies to offset more losses against profits from other financial years and make it possible to take write-offs for low-value assets more quickly.
The Federation of German Wholesale, Foreign Trade and Services (BGA) welcomed the plans. "Tax simplifications and better depreciation options are important incentives for more investment in Germany," said BGA President Dirk Jandura.
($1 = 0.9074 euros)
