Gruenderszene’s initiative, the “startup manifesto”, which aims to remove new tax proposals that could endanger German startups and entrepreneurs, was presented to German Minister for Economics Phillip Rösler on Tuesday.
The tax changes made waves in the startup and online scene when they were introduced as they include hefty taxes against small shareholdings from German investors, who are one of the most important sources of funding for startups. The new taxation would make establishing a startup much more difficult as it would mean that investments are hardly profitable for the financiers.
The entrepreneurial community is concerned that the tax proposals from the Federal Council will indeed be implemented, with Gruenderszene responding to this concern by creating the Startup Manifesto. Within a few weeks around 1,600 founders and investors signed the manifesto to protest against the taxation.
At a gathering of startups, business angels and press at Betahaus, Phillip Rösler officially took note of the startup manifesto, making his desire to find a solution that would be less of a disadvantage to startups clear.
“I share the concerns of the German startup scene. If the recommended taxes from the German Federal Council are put into place it could have a negative effect on the financing of businesses. The taxation of the Streubesitzbeteiligungen (small shareholdings of under 10 per cent in businesses) would make founding a startup more difficult and therefore have negative effects on innovation in Germany.”
The wrong signal for businesses
Rösler is adamant that he does not want the taxes to be a burden that make access to capital for young businesses and startups more difficult.
“In Germany, we need entrepreneurship and innovative businesses to advance growth and business impulse.”
The background to the manifesto is the European Court of Justice ruling in 2011, which states that handling international and local businesses differently goes against the free movement of capital. At the moment, the ECJ is against the tax regulations in Germany as shares from foreign companies are not exempt. That is the reason that the new taxation laws have been proposed to make foreign and German companies work under the same laws.