Date de publication : 06-10-1907
The following information are for the sole purpose of providing a general overview of the local taxation of the Corporate tax aspects of the country. In any case, it can not replace a tax advice, or be considered as an official information.
Yes we tax in Germany
New tax reform: No specific information.
New tax treaties:
- Protocol to tax treaty between Germany and Norway is under negotiation.
- Tax treaty between Germany and Armenia is ratified by German Parliament.
Local tax advisors
No specific information on the local tax advisors.
Resident companies are taxed on their worldwide income. However, non-resident companies are only taxed on their revenues derived from Germany sources.
Entities are considered to be resident for tax purposes in Germany if their place of management & control is in Germany.
However, the place of residence is subject to the relevant provisions of any applicable double tax treaty, if any.
Corporate Income Tax
The general CIT tax rate is 15%, plus a 5.5% solidarity surcharge. So a 15.825% effective tax rate.
Non-taxable income includes the following:
- 95% of certain dividends (participation exemption for qualified shares)
- 95% of certain capital gains :
- Profits from a permanent establishment abroad
Non-deductible expenses includes the following:
- 5% of dividends
- Certain interests exceeding a ratio.
- Fines and penalties
- CIT, VAT on non-deductible items, real estate transfer tax, and business tax
Carry forward: Yes, indefinitely, but some restrictions may apply
Carry back: Yes, but limitation
Companies should submit the tax return annually before the 31 May following the fiscal year concerned.
Companies shall pay 4 advance payments on 10 March, 10 June, 10 September and 10 December of the current taxable year.
Whithholding Taxes (payment to foreign companies)
The local tax rates in Germany are the following, subject to the provisions of an applicable double tax treaty, if any.
There is no WHT on the profits paid from a branch to its foreign head office
The general effective tax rate of WHT on dividends is 26.38% (tax rate is 25% + 5.5% surcharge).
The general rate of WHT on interest is 0%.
The general effective tax rate of WHT on Royalties is 15.83% (tax rate is 15% + 5.5% surcharge).
There is no WHT on management fees.
There is no WHT on technical services.
Capital gains are taxed as general income under the regular CIT.
Note: in certain cases capital gains are 95% exempt of CIT (i.e. sale of qualified shares).
Standard VAT tax rate is 19%
Reduce tax rate is 7%. It concerns among others, essential goods and services, newspapers, books,…
Zero-rated supplies include, subject to certain conditions:
- exports of goods;
- Supplies in connection with shipping and aviation in commercial traffic;
- Cross-border passenger and goods transportation.
Exempt supplies include, subject to certain conditions:
- Financial services
- Navigation and air traffic services
- Insurance services
- Intra-EU supplies of goods
EU taxable companies may claim a VAT refund to their own tax authorities through on the basis of the 13th EU Directive.
Certain non-resident companies (which are not required to register and incur Germany VAT in the course of their business activities in Germany) may apply for a refund.
No other specific information of VAT in Germany.
The general statute of limitation is 4 years starting at the end of the year in which the tax return for the respective tax year was filed or should have been filed.
The statute of limitation is extended to 10 years for negligent tax fraud and for wilful tax fraud.
There is no foreign exchange control in Germany.
There are thin capitalization rules in Germany. The interests derived from loans between related parties may not be deductible in case where interest exceeds some ratios.
Do not hesitate to share your experience in Germany with us in the comments below. Any comments are welcome !