1. Is Gewerbesteuer (trade tax) levied on every Gewerbe (business)?

Case – Is Gewerbesteuer due?

• Einzelunternehmen (sole proprietorship)
  Yes, but there is a trade-tax allowance (Freibetrag).

• GbR or other Personengesellschaft (partnerships)
  Yes, with a shared Freibetrag for the partnership.

• Freiberufler (e.g. journalist, designer, software developer)
  No, classic liberal professions are not subject to Gewerbesteuer.

• GmbH / UG
  Yes, from the very first euro of profit, with no allowance.

2. How is Gewerbesteuer calculated for short-term activities?

The calculation follows several steps:

1. Determine the profit (Gewinn) for the short period

$Profit(Gewinn)=Revenues(Einnahmen)-Operatingexpenses(Betriebsausgaben)$

Example:

• Sales at a Christmas market over two weeks: 7,000 €

• Expenses (rent, materials, travel, etc.): 3,000 €

→ Profit = 7,000 € – 3,000 € = 4,000 €

2. Freibetrag (Gewerbesteuer allowance)

For Einzelunternehmen and partnerships (GbR, OHG, etc.), there is an annual Gewerbesteuer allowance of 24,500 €.

This means:

• If your total annual profit (from all business activities) is below 24,500 €, you will not pay Gewerbesteuer.

• Even if you work only 10 days in the whole year, the tax office still looks at the entire annual profit, not just the number of working days.

3. Hebesatz of the municipality

After determining the taxable amount (Messbetrag) and applying the Freibetrag, the Gewerbesteuer is calculated by multiplying this amount by the municipal Hebesatz (local multiplier), usually between 200–900 %.

Typical Hebesatz examples:

• Berlin: approx. 410 %

• Hamburg: approx. 470 %

• Small town / rural municipality: often 200–300 %

Full practical example

A person sells at 3 local markets and earns a total annual business profit of 12,000 €.

• Profit is below the 24,500 € Freibetrag
  → No Gewerbesteuer is due,
  even if this person participated in, say, 10 markets during the year.

However, they must still file:

• an Einnahmenüberschussrechnung (EÜR) as part of the income tax return (Einkommensteuer)

• Anlage G or Gew (form for business income)

• in some cases, an “Erklärung zur Festsetzung der Gewerbesteuer” depending on the tax office / municipality

Important notes (FAQ)

Question – Answer

• Is the tax calculated only based on the number of market days?
  No. The calculation is always based on the total annual profit, irrespective of how many days you were active.

• Can I “avoid” Gewerbesteuer if I only work 10 days per year?
  No. A short activity period does not exempt you from declaring your profits.

• Is it possible to legally pay no Gewerbesteuer?
  Yes – if your annual profit as a sole trader or partnership is below 24,500 €, no Gewerbesteuer will be charged (you still must file your tax returns).

The editorial team has prepared this information with great care and by consulting multiple sources. However, errors or incomplete details cannot be ruled out. Please treat this article as a first orientation and always consult a tax advisor, the tax office or other competent authorities for binding and up-to-date information.