Germany to become more digital through 'Bureaucracy Relief Act'

The German government wants to reduce the bureaucratic burden for companies, administration and people living in Germany. Designed to streamline bureaucratic processes across the country, the Relief Act is poised to deliver significant economic relief, estimated to amount to approximately €944 million each year.

According to the German government this week, the new act is a project spanning various departments that includes a series of changes aimed at simplifying various administrative procedures. 

So what changes can you expect?

One notable change the act brings is reducing the retention periods for accounting documents under commercial and tax law from ten years to eight. 

This move is expected to reduce storage costs, both physically or electronically. The German government expects the savings alone to come to €626 million.

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Another welcome change will abolish the requirement for German nationals to register at hotels. Considering the 129 million tourist overnight stays in Germany annually, this move stands to save citizens a combined total of nearly three million hours each year.

The German Hotel Association (IHA) particularly welcomed the planned elimination of the registration certificate for domestic overnight guests. According to DPA, Managing Director Markus Luthe called for the requirement to also be scraped for foreign hotel guests. 

Additionally, in a further step toward digitalisation, so-called ‘written form requirements’ are being reduced to ‘text form requirements.’ Essentially the requirement for handwritten signatures are being reduced, and in some cases emails or text messages will be sufficient for making legal transactions.

Other measures include the digitalisation of operating cost accounting and enabling digital passport reading for flight check-ins in the future.

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Reactions to the Bureaucracy Relief Act are mixed, with many industry leaders suggesting that it will bring some helpful changes but may not go far enough to truly change Germany's overly bureaucratic business environment.

Chairwoman of the Startup Association, Verena Pausder, said on Deutschlandfunk: "I hope that there will be many more laws to reduce bureaucracy."

Federal Minister of Justice Marco Buschmann championed the act as a necessary step in the right direction. "At a time when we have a shortage of skilled workers, we must not keep people busy with paperwork," he said in an interview with ARD morning magazin. 

Buschmann said he can understand criticism from the business community that suggest this act does not go far enough.

He compared Germany's efforts to reduce bureaucracy with making an effort to lose weight: "It's a bit like when you've been eating pork belly for years, you can't get rid of it overnight with the push of a button."