Corporate taxation in Germany comprises different types of taxes, including income tax, trade tax, value-added tax, and customs duties. The tax rates for these taxes vary depending on the type of tax, the income/profit of the company, the location of the company, and the type of goods/services involved. The tax laws governing these taxes are specified in different acts and codes, such as the German Income Tax Act (EStG), the Corporate Income Tax Act (KStG), the German Trade Tax Act (GewStG), the German Value-Added Tax Act (UStG), and the European Union Customs Code (UCC).
The income tax in Germany is a progressive tax system, which means that the tax rate increases as the income of the company increases. The current corporate tax rate in Germany is 15%. However, for companies with an annual profit of more than 1 million euros, there is a solidarity surcharge of 5.5%. Thus, the effective tax rate for such companies is 15.825%. The income tax is governed by the German Income Tax Act (EStG) and the Corporate Income Tax Act (KStG).
The trade tax (Gewerbesteuer) is a local tax levied on companies in Germany. The tax is calculated based on the profit earned by the company and is paid to the municipality where the company is located. The trade tax rate in Germany varies depending on the municipality, but the average rate is around 14%. The trade tax is governed by the German Trade Tax Act (GewStG).
The value-added tax (VAT) in Germany is known as the Umsatzsteuer. The VAT is a consumption tax levied on the sales of goods and services in Germany. The current VAT rate in Germany is 19%, but there is also a reduced VAT rate of 7% for certain goods and services, such as food, books, and newspapers. The VAT is governed by the German Value-Added Tax Act (UStG).
The sales tax (Verkaufssteuer) is a tax levied on the sale of goods in Germany. The sales tax rate in Germany is the same as the VAT rate, which is 19%. However, the sales tax is only applicable to certain types of goods, such as automobiles, tobacco products, and alcohol. The sales tax is governed by the German Sales Tax Act (UStG).
Import duties are taxes levied on goods imported into Germany from other countries. The amount of the import duty varies depending on the type of goods, the country of origin, and the value of the goods. The import duty rates are determined by the European Union and are subject to change. In general, the import duty rates in Germany range from 0% to 17%. The import duties are governed by the European Union Customs Code (UCC).
Unlike some other countries, Germany does not levy export duties on goods exported from Germany to other countries.