Taxes

German subsidiaries of foreign companies are subject to German tax liability. A distinction is made between individual persons and companies. That means that you need to submit a tax return to the tax office every year, both for yourself as an individual and for the company. Once your company is registered, a tax number is automatically assigned to you by the competent tax office.

Please click here for German

Corporate taxation in Germany usually ensues in two stages:

Companies with shares, such as GmbH or AG, are subject to corporation tax. Partnerships as well as partners are subject to income tax.
All operations - whether companies or partnerships - are subject to trade tax, which is determined by the municipalities themselves and thus varies throughout Germany.

Calculation of trade tax:

Trade income (= profit including tax-related additions and deductions) x 3.5% x municipal assessment rate

Example for various large cities in Germany:

A company has generated EUR 100,000 trade income:

Düsseldorf: EUR 100,000 x 3.5% x 440% = EUR 15,400

Cologne: EUR 100,000 x 3.5% x 475% = EUR 16,625

Frankfurt: EUR 100,000 x 3.5% x 460% = EUR 16,100

Hamburg: EUR 100,000 x 3.5% x 470% = EUR 16,450

Munich: EUR 100,000 x 3.5% x 490% = EUR 17,150

Berlin: EUR 100,000 x 3.5% x 410% = EUR 14,350

Click here to find basic information on German tax law:

Trade and tax compass of the Chamber of Commerce and Industry IHK Düsseldorf Chamber of Commerce and Industry IHK Düsseldorf
Central point of contact for foreign investors (investor department) Bundeszentralamt für Steuern
Federal Ministry of Finance: Taxes in Germany, types and meaning
Personal wage and income tax
Düsseldorf Chamber of Tax Consultants

Nach oben