First: Quick Overview
| Tax | Gewerbesteuer (Trade Tax) | Körperschaftsteuer (Corporate Income Tax) |
|---|---|---|
| Name in Arabic | ضريبة المهن / ضريبة الأعمال | ضريبة دخل الشركات |
| Collected by | Municipality (Gemeinde) | Federal level (Bund) |
| Who is subject to it? | All businesses carrying out commercial activity (e.g. GmbH, UG, sole proprietors) | Only legal entities such as GmbH, UG, AG |
| Approx. tax rate | Varies by municipality (around 7 % – 17 %) | 15 % flat + 5.5 % solidarity surcharge on the corporate tax |
| Based on what? | Trade income (Gewerbeertrag) | Adjusted taxable profit (steuerlicher Gewinn) |
Second: Differences in practical application
Körperschaftsteuer is only levied on legal entities (juristische Personen) such as:
GmbH
UG (haftungsbeschränkt)
AG
Tax rate: 15 % on taxable income
Plus: 5.5 % solidarity surcharge (Solidaritätszuschlag) on the corporate tax amount
→ Effective burden from corporate tax + solidarity surcharge: approx. 15.825 %
Gewerbesteuer applies to all commercial activities, including sole proprietors (Einzelunternehmer) and partnerships engaged in trade.
It is calculated on the trade income (Gewerbeertrag), which is derived from profit and then adjusted according to tax rules (add-backs and deductions).
The municipality determines a Hebesatz (local multiplier), usually between 200 % and 900 %.
Approximate formula:
Gewerbeertrag × 3.5 % × municipal Hebesatz ÷ 100
Example:
Profit (Gewerbeertrag): 50,000 €
Hebesatz of the municipality: 400 %
→ Gewerbesteuer = 50,000 € × 3.5 % × 400 % ÷ 100 = 7,000 €
Yes. For corporations such as GmbH and UG, the company usually pays all of the following:
Körperschaftsteuer (15 %)
Solidarity surcharge (5.5 % of the corporate tax)
Gewerbesteuer (rate depends on the municipal Hebesatz)
In total, the overall tax burden on profits can reach roughly 30 % – 33 %.
| Type of tax | Applicable? | Notes |
|---|---|---|
| Körperschaftsteuer | No | Sole proprietors are not separate legal entities |
| Gewerbesteuer | Yes | A tax-free allowance of 24,500 € on trade income applies |
Key terms:
| German term | Meaning in Arabic |
|---|---|
| Körperschaftsteuer | ضريبة دخل الشركات |
| Gewerbesteuer | ضريبة المهن / ضريبة الأعمال |
| Hebesatz | معامل الرفع البلدي |
| Solidaritätszuschlag | ضريبة التضامن |
| Gewerbeertrag | الأرباح التجارية |
The team of writers and editors on this website strives to provide accurate information based on thorough research and consultation of multiple sources. However, errors may still occur or some details may not be fully verified. For this reason, please treat the information in the articles as an initial reference and always consult the relevant authorities to obtain final, confirmed information.
