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Dr. Volker Bastert auf XING.com
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Wir unterstützen den Verein für Deutsche Sprache
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Letzte Änderung: 22:12:48 05.08.2010
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Review of Tax Prepayments after 2008 Tax Rate Cuts
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| Here is a brief overview of new rules which apply to 2008 Corporate taxes in Germany: |
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Corporate income tax rate is now only 15 instead of 25%, and solidarity surtax is lowered accordingly. The combined federal tax rate is a mere 15.83%. |
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Local tax (gewerbesteuer) is still charged on a combined rate of general rate x local factor (hebesatz). While the local factors each city can determine would probably stay in the same 400% area where they used to be, the general rate is down from 5 to 3,5%. Paderborn local tax used to be 20.15% (5% x 403%). Now it is 3,5% x 403% = 14,105%. Combined federal and local tax rates will mostly not exceed 30%. |
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The actual tax load may stay the same or become even higher, because the lawmakers also changed the tax basis. Larger companies will have problems to deduct interest expense in case it exceeds 1 million euros per year. |
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Local tax is no longer treated as a deductible expense, but needs to be paid from aftertax income. |
The catalogue of additions to profit as the base for local tax was enlarged.
One fourth of the total of: |
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Annuities to finance investments |
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Certain profit shares of non-disclosed partnerships |
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One fifth of lease payments for tangible assets, |
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Three fourths of lease payments for land & buildings |
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One fourth of payments for trademarks, copyrights, etc. |
Given the total is over 100.000 euros per year (100.000 euros are deductible).
German Revenue Service (Finanzamt) provides a certain form on which you can apply for a reduction (all complicated issues in Germany are handled by using a form …).
We will check your tax situation in the next weeks, and let you know whether an application for reduction of prepayments may make sense.
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