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: