Germany proposes taxing income from artificial intelligence

Germany has proposed introducing taxation on income generated through the use of artificial intelligence. The additional budget revenues are planned to be directed towards retraining workers whose professions may change or disappear due to automation.

This initiative was put forward by Germany's Federal Minister for Digitalization and State Modernization, Karsten Wildberger, in an interview with Tagesspiegel, published on October 13.

According to the minister, companies that gain significant economic benefits from artificial intelligence should contribute to financing changes in the labor market.

"If economic growth and added value arise in our country, taxes must also be paid here," - emphasized Wildberger.

He explained that income from the use of new technologies could become a source of funding for professional retraining and the transition of workers to other sectors.

However, the minister has not yet presented a concrete taxation mechanism. In particular, it is unclear whether this involves a separate tax on revenue from AI or changes to the current corporate tax system. Possible rates and implementation timelines have also not been defined.

Artificial intelligence will change the employment structure

Wildberger predicts a massive transformation of the German labor market under the influence of artificial intelligence.

In his view, automation will not necessarily lead to a long-term reduction in the total number of jobs. However, a significant portion of current professions will change, and workers will need to acquire new skills.

The minister expects that in the future demand will grow for professions requiring practical skills, direct human contact, and empathy. Among examples, he cited blue-collar jobs and the caregiving sector.

Large-scale training programs will be needed to transition workers to new types of activities. Wildberger believes these can be financed by the economic results generated by AI development.

At the same time, the minister acknowledged that currently companies actively implementing artificial intelligence often create more jobs than other companies. However, he is not sure this trend will continue.

AI is already used by every fourth German company

According to a study by the Institute for Employment Research (IAB), in 2025 generative artificial intelligence was used by nearly 25% of German companies.

For comparison, in 2023 this figure was only 5%. Another approximately 9% of surveyed companies planned to start using the technology.

Companies that already used generative AI employed almost 40% of all employees in Germany covered by the mandatory social insurance system. However, this does not mean that each of them directly uses AI in their work.

This spread of technology creates new challenges for the state: from the need to finance vocational education to the possible redistribution of tax revenues between labor and capital.

IMF warned against introducing a separate AI tax

The idea of special taxation of artificial intelligence is already being discussed internationally. In particular, Microsoft co-founder Bill Gates has previously advocated for taxing robots and automated systems that replace human labor.

However, economists at the International Monetary Fund warn against introducing separate taxes directly on AI technologies.

In a 2024 study, the IMF noted that a special AI tax could deter investment, slow the adoption of innovations, and reduce economic productivity.

Instead, the fund recommended revising existing tax incentives that encourage replacing workers with automated systems, as well as improving taxation of corporate profits and capital income.

The German minister's proposal does not necessarily contradict this approach: Wildberger speaks primarily about taxing the economic results of AI use, not a special levy on the use of the technologies themselves.

The final impact of the initiative on business will depend on its legislative form. So far, this is a public proposal by a federal minister, not a government-approved bill.

Based on materials from: Tagesspiegel, Institute for Employment Research (IAB), International Monetary Fund