Business tax knowledge

Trade tax assessment rate in Munich

Munich trade tax rate: What companies should know

The trade tax rate is an important factor for companies operating in Germany, as it significantly influences the level of trade tax. In Munich the assessment rate is currently 490% (as of 2024), which is a relatively high value compared to other German cities. But what does this mean for companies and what factors should be taken into account?

What is the trade tax assessment rate?

Trade tax is one of the most important sources of income for cities and municipalities in Germany. It is levied on commercial income , i.e. on the profit that remains after deducting certain operating expenses. The trade tax assessment rate indicates how high the multiplier is for calculating trade tax. It is set individually by the municipalities and therefore varies from city to city.

Why is the trade tax rate in Munich higher than in many other cities?

Munich is one of the economically strongest regions in Germany. With its high quality of life, strong infrastructure and numerous local companies, especially in the IT and financial sectors, the city is a magnet for companies and skilled workers. The high tax rate in Munich reflects this economic attractiveness, as the city uses this income to invest in infrastructure projects, educational institutions and other offerings that promote the quality of life and the business environment.

Judgment of the Federal Court of Justice from 1965

Anyone who has the obligation to pay taxes has the right to save taxes.

What does the assessment rate in Munich mean for companies?

For companies in Munich, the high assessment rate has a direct impact on the tax burden. Anyone who sets up a company or opens a permanent establishment should be aware that trade tax can make up a significant part of the total costs. Nevertheless, Munich offers attractive location advantages in return that can offset the higher tax burden. These include:
- Access to a large pool of skilled workers : Due to its high quality of life, Munich attracts highly qualified workers from various industries.
- Economic networks : Numerous companies from the areas of technology, finance, media and automobiles offer cooperation opportunities and synergy effects.
- Infrastructure and logistics : Munich offers excellent transport connections, both nationally and internationally, which makes doing business easier.

Profit from commercial operations

120.000 €

Additions according to Section 8 GewStG.

+30.000 €

Reductions according to Section 9 GewStG

- 20.000 €

Remaining business income

130.000 €

Tax Metric

3,5%

Measurement amount

4.550 €

Munich assessment rate

490%

Trade tax

22.295 €

Comparison with other cities

Compared to other cities in Germany, the trade tax rate in Munich is one of the highest. For example, the assessment rate in Berlin is 410% , in Hamburg it is 470% and in Frankfurt am Main it is 460% . Smaller cities or rural areas often have significantly lower assessment rates, but these often do not offer the same location advantages as a metropolis like Munich.

Attractive locations in the immediate vicinity of Munich include Grünwald (240%), Gräfelfing (250%) and Taufkirchen (250%).

Conclusion: Munich trade tax assessment rate – worthwhile despite higher tax burden?

The trade tax rate of 490% may seem high, but the numerous location advantages make Munich still one of the most attractive business locations in Germany. Companies that rely on highly qualified employees, excellent infrastructure and a strong economic environment will find ideal conditions for long-term success here.

If you want to set up a company in Munich or optimize your tax planning, it is advisable to consult with a tax advisor or financial expert at an early stage about the effects of the trade tax assessment rate and possible tax strategies. Alternatives could be our co-working locations near Munich, which are located in communities with very low trade tax rates.