[World Tax News] Germany Proposes Tax Incentive for Post-Retirement Employment and More

Editorial Team – [2025] 180 taxmann.com 204 (Article)

World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week:

1. Germany proposes tax incentive for post-retirement employment

The German Ministry of Finance has released a draft bill proposing a new incentive to encourage continued employment beyond the standard retirement age. Under the proposal, individuals who remain employed after reaching retirement age would be eligible for a tax-free allowance of up to EUR 2,000 per month. To qualify, employers must continue making pension insurance contributions for such employees.

The exemption can be applied by only one employer to prevent multiple claims. The incentive is proposed to take effect from 1 January 2026.

Source – Draft Bill

2. Canada to introduce new tax credit for personal support workers in Budget 2025

The Department of Finance, Canada, has announced that Budget 2025 will include measures aimed at strengthening support for Canadian workers. Among the proposed initiatives is a temporary five-year Personal Support Workers Tax Credit, available from 2026 to 2030. The credit would allow eligible personal support workers to claim a refundable tax credit equal to 5% of their eligible earnings, up to a maximum of CAD 1,100 per year.

Personal support workers are healthcare professionals who assist individuals with daily living activities due to age, illness, or disability. The tax credit will apply in provinces and territories that have not entered into bilateral agreements with the federal government to raise wages for personal support workers. As noted in the release, such agreements are already in place with British Columbia, Newfoundland and Labrador, and the Northwest Territories.

Source – News Release

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