Taxation in Germany

Taxation mostly depends on the legal structure of a business, its size and activities. The most important German Acts embracing taxation are the following:

• VAT Act
• Income Tax Act
• Trade Tax Act
• Corporation Tax Act

It is important to notice that the German taxation system differentiates between direct taxes and indirect taxes.

German direct taxes

The following are the most important direct taxes for businesses in Germany:

• Income tax (business owners);
• Corporation tax (e.g. limited liability company, stock corporation, cooperative association);

German indirect taxes

he following are the most indirect taxes for businesses in Germany:

• Value-added tax or Vat tax (all business owners ). It should be paid by the 10th of the month following a prepayment period (month or quarter);
• Trade tax, which foresees a quarterly prepayment;

Submitting your tax declaration in Germany

In Germany the tax declaration should be submitted after end of calendar year. Taxes are administered by the tax offices ("Finanzamt"). A German tax authority, the Federal German Fiscal Administration's Form Management System (FMS) offers online services in order to facilitate taxpayers by submitting the annual tax declaration.

Futhermore, businesses are obliged to file electronic declarations for payroll tax and VAT.