Company Taxation

Companies in Germany are usually taxed on two levels.

On the first level, corporations - such as the stock corporation (AG) and limited liability company (GmbH) - are subject to corporate income tax (Körperschaftsteuer), whereas partnerships are subject to personal income tax (Einkommensteuer). Both taxes are levied by the federal government.

On the second level, all business operations - corporations and partnerships alike - are subject to the trade tax (Gewerbesteuer), which is imposed by local municipalities (i.e. the town or city where the company is based).

Our model calculation shows how the overall tax burden for corporations and partnerships is determined.