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Company Taxation in Germany
Kinds of Taxes
The company taxation in Germany is complicated despite of all efforts
to simplify the German Taxation Law and to render it more transparent.
Because of this reason, these pages only give a basic overview on the
different kinds of taxes and their relevance for different enterprises.
Therefore an important note in advance:
nearly no enterprise in Germany works without the support of a competent
tax consultant. The German Tax Consultant Association (“Deutscher
Steuerberaterverband”) offers an 
online
research service in order to find the suitable tax consultant.
The company taxes in Germany can be divided into three categories:
- Profit taxes are directed towards corporate profits (for private
persons: towards the income). This includes, e.g., the corporate tax,
the income tax, and the business tax.
- Excise taxes concern the use of income or the purchase of
assets. Examples: for the purchase of goods or services, the sales tax
is raised (for private concerns known as value-added tax), for the purchase
of real estate, the tax on purchase of real estate (“Grunderwerbssteuer”).
- Substance taxes (“Substanzsteuern”) nowadays are
only of little importance. Currently, only the property tax (“Grundsteuer”)
and the estate tax (“Erbschaftssteuer”) and gift tax (“Schenkungssteuer”)
are raised.
Tax practices
In general, the local tax office contacts you automatically after you
have have finished the registration of your business. You will receive
a questionnaire on which the relevant data of your enterprise with regard
to taxes are queried. After having filled in and having sent back the
questionnaire, you will receive a tax number from the local tax office.
What is the tax burden level for enterprises in Germany?
This question cannot be answered offhand. The tax burden level is dependent
on a series of factors. As approximate value, often a tax rate of about
36 % for enterprises is named. But since the tax liability is composed
of different elements and since these elements differ according to the
individual situation (e.g. legal form, location of the enterprise), the
real level of the taxes to be paid may differ significantly from this
standard.
Which taxes does my enterprise have to pay?
Business tax and sales
tax have to be paid by all enterprises. If your enterprise is a capital
company (limited liability company or corporation), it has to pay corporate
tax, the partners or owners of partnerships or one-man businesses
have to pay income tax.
As long as you have employees you are committed to pay the wage tax to
the local tax office. However, this is no tax burden to be paid by your
enterprise, but by the employee. The enterprise only has the task to withhold
the taxes from the wages of the employees and to pay the amount to the
local tax office. You will find detailed information under Employees.
Probably, you will come across other taxes to be paid (e.g., property
tax, if your enterprise possesses an own real estate); these are not treated
in detail here, because this is too much dependent on the specific situation
of the enterprise. Therefore once again we would like to advise you to
make use of a competent tax consultant’s help.
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Income
tax
Overview