Europe · Tax guide

Germany

Germany taxes companies twice: corporate income tax of 15% (falling to 10% by 2032) plus a municipal trade tax, for a combined burden of about 30%. VAT is 19%, B2B e-invoicing is being phased in, and Germany applies the global minimum tax. Taxes are administered by the local tax offices (Finanzämter) and the Federal Central Tax Office (BZSt).

Updated 1 October 2026 · 19 of 21 figures checked against official sources

Check your obligations

At a glance

Corporate income tax
15%

15.825% with the solidarity surcharge

Combined with trade tax
about 30%

Trade tax varies by municipality

VAT
19%

Reduced rate 7%

Withholding on dividends
26.375%

Before treaty or EU relief

Real estate transfer tax
3.5% to 6.5%

Set by each federal state

Global minimum tax
15%

Groups with revenue of €750 million or more

Corporate income tax and trade tax

Companies pay corporate income tax (Körperschaftsteuer) at 15%, or 15.825% with the solidarity surcharge. The rate falls by one point a year from 2028 until it reaches 10% in 2032.

On top, every municipality levies trade tax (Gewerbesteuer) at its own multiplier, so the combined burden is typically about 30%. Sole traders and partnerships get a trade tax allowance of €24,500 and can largely credit trade tax against income tax.

  • Sole traders and partners pay income tax on business profits at progressive rates up to 45%, plus the solidarity surcharge on high incomes.
  • Returns are filed electronically, normally by the end of July of the following year (later with a tax adviser), with quarterly advance payments.

VAT (Umsatzsteuer)

VAT is charged at 19%, with a reduced rate of 7% on most food, books and local public transport. Advance VAT returns are filed monthly or quarterly, plus an annual return.

Small businesses can use the small business scheme (Kleinunternehmerregelung) and charge no VAT if turnover was at most €25,000 last year and stays at or below €100,000 this year.

E-invoicing

Since 2025 every business must be able to receive structured e-invoices (such as XRechnung or ZUGFeRD) from other businesses. From 2027, businesses with prior-year turnover above €800,000 must also issue them, and from 2028 all businesses must.

Withholding tax on payments abroad

  • Dividends: 26.375% including the solidarity surcharge, reducible by treaty or the EU Parent-Subsidiary Directive (refund or exemption certificate from the BZSt).
  • Royalties and similar payments to non-residents: 15.825% including the solidarity surcharge, reducible by treaty.
  • Construction work: the customer withholds 15% from payments to builders without an exemption certificate.

Transfer pricing and the global minimum tax

Cross-border related-party transactions must be at arm's length and documented, including a transaction matrix that must be produced within 30 days of a request in an audit. Below €6 million of goods and €600,000 of other related-party transactions in the current financial year, simplified documentation is enough. A master file is required once the German entity's revenue reaches €100 million.

Groups with revenue of €750 million or more file country-by-country reports and are subject to the global minimum tax at 15%.

Real estate transfer tax

Buyers pay real estate transfer tax (Grunderwerbsteuer) of 3.5% to 6.5% of the price, depending on the federal state. Transfers of 90% or more of a property-owning company within ten years are taxed as if the property itself were sold.

Key dates

  • Monthly or quarterly, by the 10thAdvance VAT return and payment (one-month extension available)
  • QuarterlyAdvance payments of corporate income tax and trade tax
  • End of July of the following yearAnnual tax returns (later when prepared by a tax adviser)

Figures and sources

21 figures

Indicative only. This assessment is a high-level overview of German tax obligations based on the information you provided and rules in force for 2026. It is not tax or legal advice. Consult a German tax adviser (Steuerberater) before making compliance decisions.