In general, trade tax in Germany is one of the most important taxes collected by cities and municipalities. The amount is determined based on the income of the respective business. The process is legally regulated in the Trade Tax Act.
We would like to briefly explain the tax law background here. In Germany, anyone who has registered and operates a business must also pay trade tax. The abbreviation for the term trade tax is GewSt. The trade sector includes, for example, retail businesses, craft businesses, service providers and industrial companies.
The municipalities levy a trade tax using a self-
defined assessment rate . It is important to know that the level of trade tax is not uniform throughout Germany, but varies regionally.
The decisive factor for the remaining amount of the tax liability is the commercial income - sometimes also referred to as
commercial profit . It forms the starting point for all calculations in the respective calendar year, the so-called assessment period, after application of the income tax and corporate tax laws.
Additions and reductions are also taken into account . New regulations have been in effect for added amounts since the beginning of January 2008. Among other things, leasing installments, interest from rental or lease agreements, and payments for debts are recognized.
