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Summary Trade tax (Gewerbesteuer) is a municipal tax on commercial profits, calculated as profit × 3.5% base rate × local assessment rate (Hebesatz). Sole proprietors and partnerships receive a €24,500 allowance (associations €5,000), while corporations get none. Payments are made as advance instalments based on profit forecasts and reconciled in the annual return. The tax …

Summary Corporation tax is a nationwide 15% tax on the profits of UG, GmbH, AG and other legal entities, applied to both distributed and undistributed profits. A solidarity surcharge and, typically, trade tax also apply. German-resident corporations are taxed on worldwide income, while non-resident corporations are taxed on German-source income. Taxable income starts from the commercial …

Summary VAT in Germany applies to nearly all goods and services supplied for payment. The standard rate is 19%, with a reduced rate of 7% for essentials like food and books. Businesses earning over €25,000 must charge VAT and submit advance returns through the ELSTER portal. Correct bookkeeping and valid invoices are essential for claiming …

Summary In Germany, capital gains tax is a flat 25% tax on income from interest, dividends, or selling shares. A small solidarity surcharge and church tax may also apply. The bank usually takes the tax automatically, so investors do not have to file separately. Everyone has a yearly tax-free allowance before the tax is charged. …

Summary Income tax is a direct, progressive tax on the income of natural persons, covering seven income types (e.g., employment, self-employment, business, rentals, capital). Liability is generally unlimited for residents and limited to German-source income for non-residents. Partnerships don’t pay income tax themselves; their partners are taxed individually. Your tax base is the taxable income …

Summary German corporations such as GmbH, UG (haftungsbeschränkt) and AG must allocate part of their annual profits to reserves. Companies must distinguish between different types of reserves, such as the capital reserve and retained earnings reserve. UGs in particular must transfer at least 25 % of their annual profit (after prior-year losses) into a legal …

Summary In Germany, a payslip shows your gross earnings, special payments (bonuses, allowances), and then subtracts taxes and social contributions (health, pension, unemployment, nursing care). It also lists deductions like wage tax, church tax, and solidarity surcharge. Your net salary appears after all these deductions. It may include employer contributions or benefits (e.g. capital-forming payments). …

Summary When calculating labour costs in Germany, employers must include all non-wage components beyond regular salaries. These additional expenses typically represent about 21 % of gross wages and cover social insurance, health, pension, accident and care contributions. Further levies such as U1, U2 and insolvency insurance also add to the total cost. Accurately understanding these …

Contents Payslip basics Key abbreviations Tips Conclusion   What is a payslip? This payslip in Germany goes by several names: Mainly Gehaltsabrechnung but also Entgeltabrechnung and Lohnabrechnung. As the name suggests, this document clearly shows the gross and net values of an employee’s remuneration and proves the employee’s financial entitlements. Once a month, the employer …

Summary Small businesses in Germany are allowed to use a simplified VAT scheme, if their annual turnover stays below legal thresholds. This reduces administrative work and accounting costs, but it also means you cannot deduct input tax from business expenses. The decision to use this rule should balance simplicity against the potential tax advantages of standard …