Final two days for mandatory 2025 tax returns
The general deadline for submitting a mandatory 2025 German income-tax return without professional representation is Friday, 31 July 2026. Taxpayers using a Steuerberater or Lohnsteuerhilfeverein generally have until 1 March 2027.
As a Sole proprietor in Germany, I have to file an Income Tax Return, Umsatzsteuererklärung and a Gewerbesteuererklärung. I file these myself but try to submit them near the deadline because I usually have a large tax bill 🙂
German economy modest growth in Q2
Germany’s economy showed modest growth in the second quarter despite higher energy and commodity costs linked to the Middle East conflict. Industry was supported by stronger foreign demand and exports, while consumer spending remained comparatively stable. Some activity may have been pulled forward as companies and consumers bought goods early to avoid possible shortages, and the Bundesbank expects overall 2026 growth of only around 0.5%.
Mercedes stabilises profit, but China weakness threatens jobs
Mercedes-Benz reported a 22% increase in second-quarter operating profit to approximately €1.5 billion, helped by cost reductions and stronger results from vans and financial services. Its shares rose sharply after the announcement.
That said, Mercedes’ sales in China fell 30%, prompting the company to lower its annual revenue and vehicle-sales outlook. The group is responding through shifting some production toward lower-cost locations such as Hungary and Poland.
This is another warning for Germany’s automotive labour market, especially for workers in production, engineering, purchasing and supplier companies.
Labour market remains stable rather than strong
Germany had 2.936 million registered unemployed people in June, with the unemployment rate falling slightly to 6.2%. However, the number receiving unemployment insurance benefits was 90,000 higher than one year earlier.
The Federal Employment Agency says recent employment growth has been driven significantly by workers from abroad.
My warning to you is to stay vigilant. The automotive industry is not doing great. They are trying to find a new market with Defence but its an extremely difficult market to break into. Most suppliers will not get in.
Housing affordability remains difficult
German residential-property prices rose 1.4% year-on-year in the first quarter of 2026, confirming that the market is gradually recovering.
For buyers, recovering prices are combining with mortgage rates that remain comparatively high. Analysts expect German home prices to rise by around 3% annually through 2028, while rental growth in major cities could remain even stronger because construction is still below estimated demand.
Use my Buy VS Rent calculator to analyze your numbers.
Market Review
| Market proxy | Daily change | Quick interpretation |
|---|---|---|
| MSCI World | +0.18% | Global equities edged higher despite weakness in technology and emerging markets. |
| S&P 500 | +0.19% | US large caps remained resilient ahead of major earnings and central-bank decisions. |
| Nasdaq-100 | −1.00% | Technology shares continued to retreat amid concerns about valuations and AI spending. |
| Germany | +0.31% | German equities gained, helped by Mercedes’ stronger-than-expected profit. |
| Euro Stoxx 50 | +0.02% | Eurozone large caps finished nearly flat after an initially positive session. |
| Emerging markets | −1.97% | Emerging markets suffered a sharp risk-off move. |
Market mood
Mixed, with Europe holding up better than growth-heavy markets. Falling oil prices are reducing inflation fears and supporting German and European shares, while technology and emerging markets remain under pressure. The DAX gained strongly during Tuesday’s European session, with Mercedes among the leading performers.
Bottom Line
The immediate practical priority is the 31 July tax deadline. Germany’s economy appears to have avoided a significant second-quarter contraction, but the jobs picture remains fragile, particularly in automotive and industry. Falling oil prices provide welcome relief for household costs, while markets currently favour German and broader European equities over technology and emerging markets.
Disclaimer: None of the content in this article is meant to be considered as investment advice, as I am not a financial expert and am only sharing my experience with stock investing. The information is based on my own research and is only accurate at the time of posting this article but may not be accurate at the time you are reading it.