Corporate taxation in Germany usually ensues in two stages:

  1. Companies with shares, such as GmbH or AG, are subject to corporation tax. Partnerships as well as partners are subject to income tax.
  2. 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: