Definition of tax obligations

Corporations that have their their registered office or management in Germany are generally liable to pay tax on their worldwide income. Corporations are, in particular, corporations such as limited liability companies (GmbH).

Corporations that do not have a registered office or management in Germany may be subject to tax in Germany if they generate domestic income. This applies, for example, to profits from domestic branches and permanent establishments.

Among other things, the following are subject to tax Company profits, capital gains and investment income . Under certain circumstances, a tax exemption may apply to capital gains.

Types of corporate taxes in Germany

The profits of corporations in Germany are subject to corporation tax in the amount of 15% . Above a certain exemption limit, the tax amount is subject to an additional solidarity surcharge of up to 5.5 % . . In addition, for corporations that maintain a domestic permanent establishment, the local authorities levy a trade tax levied by the municipalities. Overall, the corporate tax burden averages around 30%.

The tax authorities of the federal states are responsible for enforcing and implementing the tax regulations.

The corporation and trade tax returns must be submitted annually by July 31 of the following year. If the returns are prepared by a member of the tax advisory professions, the tax return deadline does not end until the end of February of the second following year.

The declarations must be electronically to the tax office.

After the corresponding assessment by the tax office, quarterly advance payments on the corporation tax.

Corporations are generally required to keep accounts. The tax return must be accompanied by an electronic balance sheet (e-balance sheet) to the tax office with the tax return.