German Bundestag approves temporary fuel tax cut and tax‑free employer premium

The German Bundestag voted on a coalition proposal to temporarily lower the mineral‑oil tax on gasoline and diesel by 14.04 cents per litre, amounting to roughly a 17‑cent discount per litre when VAT is included. The reduction applies from 1 May to 30 June 2026 and is expected to reduce tax revenues by about €1.6 billion for the year.

In the same session, legislators approved a tax‑free employer premium that allows companies to pay up to €1,000 per employee as a relief payment, payable without social‑security contributions until 30 June 2027. The bill passed the Bundestag with 451 votes in favour, 134 against and one abstention. However, on 8 May 2026 the Bundesrat refused to give its consent, effectively blocking the measures.

The proposals were supported by the Union and SPD coalition factions, while opposition parties including the AfD and Die Linke opposed the drafts.