Will the tax break for tradespeople be abolished?

The tax break for skilled trades services is under discussion. Jörg Dittrich, president of the German Confederation of Skilled Crafts, strongly warns against its abolition, also citing concerns about undeclared work and tax evasion.

This article is part of the special feature " Tax bonus for craftsmen's invoices: What you should know".

Tax breaks for skilled trades services – also known as the skilled trades bonus – and household-related services are on a list of measures slated for elimination by the Federal Ministry of Finance. This was previously recommended by the Federal Court of Auditors in order to increase government revenue by abolishing these and other tax breaks.

The press release from the Federal Ministry of Finance regarding the key figures for the 2027 federal budget, adopted by the Federal Cabinet on April 29, 2026 , states only that " financial aid and tax breaks" are to be reduced as part of a package of measures for budget consolidation. However, the reductions have not yet been finalized , Federal Finance Minister Lars Klingbeil explained to the press.

Jörg Dittrich, President of the Central Association of German Crafts (ZDH), commented on the potential end of the program one day before the cabinet meeting : "It remains unclear what the Federal Finance Minister means by reducing financial aid and tax breaks within the framework of budget consolidation. It is causing considerable uncertainty for craft businesses that in recent days it has been repeatedly heard in political circles that the SPD leader understands this primarily to mean the abolition of tax breaks for craftspeople's services and household-related services."

The misleadingly named "craftsmen's bonus" is not a bonus for businesses , Dittrich emphasizes. Rather, it is a targeted tax incentive for consumers that strengthens legal work and effectively curbs undeclared work and tax fraud.

You might also be interested in:

Operations management

If a craftsman installs photovoltaics, the costs are tax deductible

Craft policy

Planned abolition of mini-jobs causes a stir

Craft policy

Do not further burden the trades

➡️ The maximum deduction for craftsmen's services is currently 20 percent of a maximum of 6.000 euros in labor costs (not materials), i.e. 1.200 euros per year for private individuals (§ 35a EStG).

The president of the German Confederation of Skilled Crafts emphasizes that abolishing the tax break for skilled trades services right now would be wrong and send a contradictory signal: "On the one hand, the fight against undeclared work and tax fraud is emphasized by the Federal Finance Minister on Monday, only to then open the door two days later on Wednesday to abolish a key incentive for placing orders in legal businesses and thus severely hinder the fight against undeclared work."

In the current tense economic situation, abolishing the tax incentive for highly skilled craftsmen's services would be a serious mistake, warns Dittrich. 

Sweden has such a consumer bonus, and Austria recently introduced one. "In Sweden, they even expanded it. They made it easier to access in order to boost demand."

The tax reduction stabilizes private demand, enables necessary modernizations and has a direct impact on the broader trade sector, particularly on small and medium-sized businesses in the finishing trades.

Dittrich continued: "If this incentive disappears, investments will be postponed, while undeclared work will regain its appeal, with negative consequences for tax revenues, social security contributions, and quality standards. The energy-efficient renovation of existing buildings would also be further hampered. The effect of this instrument is clear in practice: it strengthens legal employment and ensures that services are provided where they belong, namely in the regular economic cycle. "

Source: ZDH

DHB now also available digitally! Simply click here and register for the digital German Crafts Journal (DHB)!