The parties due to form the next coalition government have agreed on a programme for the next four years. The basic tax policy is to accept a substantial budget deficit in 2006 in the hope of boosting the economy prior to a return to budget discipline in 2007. The coalition agreement as published mentions a number of tax projects, but gives few details. Press announcements and similar statements have been more specific, but the overall picture is as yet far from complete. In any case, the concrete proposals must be regarded as provisional at the present time. The coalition agreement does not include any comments with regard to the participation exemption. Therefore it seems to be sure, that there will be no changes with regard to the taxation of capital gains resulting from the sale of participations in 2005. Corporation, trade and income taxes are to be reformed for 2008 with the objectives of simplification and protecting the systems from abuse.