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Taxes in Germany

Taxes in Germany

The taxation system in Germany has more than 40 kinds of taxes. Considering that it’s easy to be entangled in their diversity and the treatment, people generally handle their financial affairs management to experts who consult them and prepare annual income tax returns.

Personal income tax (Einkommensteuer)
The taxable item is the income received by individuals during the year from different sources such as commercial and industrial activities, rental activities, speculation in securities, etc. Compared to Russian income tax, German is progressive. It can range from 0 to 42%.
When charging the tax, there are various benefits and limitations depending on your marital status, possession of children, expenses, as well as special situations – illness or accident.

Corporate income tax (Körperschaftsteuer)
This is a tax on income of legal entities. The starting point for this tax calculation is the profit generated from commercial and industrial or other activities of the legal entity. This profit is сcalculated by the rate of annual revenue excluding specified deductions and allowances.
The ammount of corporate income tax is 15% to date.

Value-added Tax (MwSt. Oder Umsatzsteuer)
The total rate of value-added tax in Germany is 19%. There are a number of food products, print production and a variety of services, which are reduced to 7%. This tax is indirect and is already added to the price of goods to the end user, its amount is required to be specified in the accounts and checks.

Trade tax (Gewerbesteuer)
This tax applies to legal and natural persons engaged in commercial, industrial and other activities. There are a number of professions exempt from this tax, such as doctors, lawyers, musicians, artists, journalists, etc. The assessment base for the trade tax charged is the income generated from entrepreneurial activity. The tax rate is fixed by the municipal authorities and ranges from 0 to 3.5%.

The land tax (Grundsteuer)
This tax is levied on land owners. Its rate is determined by the municipal authorities and is about 1.5%. Government and religious institutions are released from this tax payment.
Attention!!! The land tax in Germany, in contrast to France, for example, is exactly the same for both German citizens and foreigners who do not reside in Germany permanently. Real estate purchaser receives the tax payment requirement from financial body only in a few months after acquisition. Thus, in Germany, the alien property owner receives no shock bills to pay tax on the land, as in many other countries. In some regions of Germany the rule even exists that if the property owner does not lease out his property and does not live in it permanently, he is released from land tax.
Our consultants are ready to provide you with more information personally.

Land acquisition tax (Grunderwerbsteuer)
It is charged when land is transferred from one owner to another. This current tax amount is 4.5% of the land acquisition value.


Real Estate Germany

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