The average total corporate tax burden for Germany is 28.9 percent, which is lower than other large industrialized countries like France, Spain, Italy and the U.K. It is taxed in two different ways depending on your legal structure. For more detailed information, Deloitte has prepared a thorough review of German taxes. Our U.S.-based team is also available to help with your specific situation, a confidential service we offer at no cost on behalf of Germany’s largest state, Bavaria.
Legal entities AG or GmbH are subject to a 15 percent corporate tax. All profit distributions to the shareholders are then taxed at 60 per cent and subject to a flat rate withholding tax of 25 percent, which means that another 15 percent tax is due when a profit distribution is made.
Partnerships with GbR, oG or KG structures are not subject to corporate tax. Instead, the company’s profit shares are attributed to individual shareholders, who must pay income tax individually in line with the progressive tax rate, currently at a maximum of 45 percent).
Both corporations and partnerships pay local business rates, which are a district-level tax that vary since they are determined by the local district administration. The usual rate is around 15 percent, but our team can help you evaluate this further if necessary.
Feel free to contact one of our U.S. representatives directly, or request a meeting using the form below.
Representative offices for the Bavarian U.S. Offices for Economic Development are located in Boston, New York and San Francisco to assist American companies interested in establishing an office or facility in Germany. We provide complimentary and confidential services for all stages of setting up a business in the state, from planning and site selection to implementation. Contact us to help you land in Bavaria successfully.
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