Determining the Overall Tax Burden

According to the company taxation rules outlined before, the overall tax burden is to be calculated as follows:

Final withholding tax is a flat tax of 25 percent on current income from capital such as dividends from stock corporations and interests as well as income from transactions (e.g. shares of corporate companies accruing from December 31st, 2008).

Only private individuals are liable to this tax. The solidarity surcharge is also levied on final withholding tax – resulting in a total tax burden of approximately 26.4 percent.

If a bank or other financial institution pays out such income from capital, the bank or financial institution simply withholds the tax and transfers it to the responsible tax authorities.