Germany’s 2027 tax reform proposes data-centre and payroll changes

Data-centre trade-tax allocation

Article 3 would amend section 29 of the Gewerbesteuergesetz, replacing the usual wage-based allocation for businesses operating exclusively qualifying data centres with a 10% wage and 90% electrical-capacity formula. The capacity measure is the non-redundant nominal connection capacity contractually agreed with the electricity supplier, not actual consumption. The change would first apply for 2027 and could shift taxable allocations towards municipalities hosting facilities with high power capacity but few employees. It depends on a proposed Energy Efficiency Act definition covering installed IT connection capacity of at least 500 kW, rather than an already enacted definition.^[2][6]

Scope remains contested

Bundesrat committee recommendations dated 5 October seek broader coverage for integrated operators, inclusion of IT operators using colocation facilities, and a transition for existing centres. These are recommendations, not adopted amendments. The bill’s exclusive-operation condition is therefore material: groups should not assume that a mixed cloud or telecommunications business automatically qualifies.^[2][3]

Payroll supplements and mini-jobs

The reform would raise the basic hourly pay ceiling used to calculate tax-free Sunday and public-holiday supplements under Einkommensteuergesetz section 3b from €50 to €75, without increasing the exemption percentages. The night-work ceiling would remain €50. Proposed changes to the Sozialversicherungsentgeltverordnung would align qualifying collectively agreed Sunday/holiday supplements with the €75 ceiling; the collective agreement must apply in full, rather than through isolated incorporated clauses. Night-work and other Sunday/holiday supplements retain the existing €25 social-insurance calculation ceiling.^[2][5][7]

Separately, the unified flat tax under Einkommensteuergesetz section 40a(2) for qualifying mini-jobs would rise from 2% to 5%, including solidarity surcharge and church tax. The economic committee recommends removing that increase. The employee expense allowance under section 9a would rise from €1,230 to €1,430, affecting payroll calculations rather than creating a new corporate deduction.^[2][3][5]

Income-tax bands and timing

Section 32a’s basic allowance would rise to €12,564 in 2027 and €12,900 in 2028. From 2027, the 42% marginal band would start at €70,601, the 45% band at €250,000 and a new 47% band at €280,000. These are marginal rates, not rates on all income. The package also increases child allowances and child benefit and reduces household craft-work tax relief. Most amendments are proposed for 1 January 2027, with further family-relief and tariff changes for 2028.^[2][5]

Two bills, not settled rules

The separate Jahressteuergesetz 2026, referred to committees on the same day, proposes revised section 3b wording retaining a €50 ceiling. Finance committee recommendations on the reform also favour retaining €50 and changing the supplement percentages instead. Neither text establishes the final coordinated rule. MNE payroll and data-centre teams should model the proposals separately and follow legislative amendments; this reform overview is not a review of all measures in the larger Annual Tax Bill.^[1][2][3][4]