Taxes - Germany

Updated 10/2010

Legal requirements

Taxation depends on the legal structure chosen, the size of the business and whether it practises one of the liberal professions. Various Acts cover taxation:

VAT Act
Income Tax Act
Trade Tax Act
Corporation Tax Act

Taxation system

Direct taxes

The main direct taxes for businesses are the following:

income tax, which has to be paid by business owners;
corporation tax, which has to be paid by a limited liability company, stock corporation and cooperative association;
trade tax, which is paid by anyone in business (with the exception of the liberal professions and specific occupational groups such as farmers).

Indirect taxes

The main indirect tax for businesses is the following:

value-added tax (formerly turnover tax), which has to be paid by all business owners (except small business holders).

Administrative procedures

Registration with the tax office

Submitting your tax declaration

Taxes are generally administered by the tax offices. The Federal German Fiscal Authority’s Form Management System (FMS) offers online services and interactive forms for this.

Form Management System (FMS)

Businesses are obliged to file provisional electronic declarations for payroll tax and VAT. Practical assistance is available from the ‘Elsterformular’, a free piece of software for electronic tax declarations.

Service portal of the Fiscal Administration for Businesses (Elster)
ElsterFormular system

The following deadlines apply for paying taxes:

Value-added tax: by the 10th of the month following a prepayment period (month or quarter)
Income tax / corporation tax / trade tax: quarterly prepayment; tax declaration after end of calendar year
Overview: Taxes Who pays, and when?

Resources

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