Corporation Tax in Germany

Corporation tax is applicable to corporations

The corporation tax ("Körperschaftsteuer") applies to all corporations and extends to  all their income. 


The tax rate for corporations is uniformly 15% plus solidarity surcharge of 5.5%.


The corporation tax prepayments are due on the same dates as for the income tax prepayments.


After expiry of the assessment period, a tax return must be submitted to the tax office. The determination of the taxable profit is made in accordance with the provisions of the income tax act and the Corporate Income Tax Act ("Körperschaftsteuergesetz").


Capital gains from the sale of shares in other corporations are 95% exempt from the corporate income tax.


The same 95% tax exemption applies to ongoing dividends received from a corporation if the receiving entity owns at least 10% of the other corporation.


Losses of a corporation will be "saved" and can be offset against future profits as tax loss carryforwards. A shareholder change can lead to a (partial) loss of a tax loss-carryforwards.


In addition to the corporate income tax a local trade tax on income is applied with a tax rate of 7%-17.15%. Also, the solidarity surcharge of 5.5% is applied on the corporation tax.


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