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You run a trade business

Computing and filing trade tax

Understand how profit becomes trade income, compute add-backs, deductions, base amount and tax, allocate the base amount between several municipalities, plan the prepayments, credit the tax against income tax, and file the returns: 10 steps.

Start here: Computing German corporation tax and trade tax

Understand: trade income, add-backs, allocation, tax credit

  1. Step 1 of 10
    CoursePaid individually38 min

    Computing German corporation tax and trade tax

    The descending rate path of § 23 KStG down to 10 % from 2032, the solidarity surcharge with no threshold for corporations, and then the four steps of trade tax: trading income with the weighted add-backs of § 8 no. 1, rounding before allowance, a tax base figure of 3.5 % and the municipality's multiplier. Two modules with fully worked cases.
  2. Step 2 of 10
    CoursePaid individually41 min

    German trade tax: add-backs, apportionment and credit

    What comes after the basic computation: classifying the items of § 8 no. 1 GewStG correctly and seeing their effective weight, the other add-backs and their mirror-image deductions, the trade loss of § 10a, the apportionment of the tax base amount by payroll, the filing obligations and the credit against income tax under § 35 EStG. Two modules with fully worked cases.

Compute: add-backs, deductions, trade tax, allocation, prepayments, credit

  1. Step 3 of 10
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    German trade tax add-backs — GewStG s. 8 no. 1

    TWO tiers of fractions, and the second does not replace the first. Each item enters the sum at ITS own fraction, and then ONE QUARTER of the amount above EUR 200,000 is added back. Applying a quarter to the gross expenses is right only for the items taken in full (letters a to c) — for rights (one quarter), immovable (half) and movable assets (one fifth) it misses the result.
  2. Step 4 of 10
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    German trade tax deductions — GewStG s. 9

    Since the 2025 assessment period, the deduction for business-owned real estate is the land tax actually booked as an expense — no longer 1.2 percent of the assessed value. Dividends from holdings of at least 15 percent at the start of the period are deducted to the extent they are included in profit, less directly related expenses. Donations reduce trade income up to 20 percent of profit or 4 per mille of turnover and wages.
  3. Step 5 of 10
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    German trade tax calculator — base amount and municipal multiplier

    German trade tax arises in three steps: round the trade profit down to whole hundreds of euros, deduct the allowance (individuals and partnerships only), take 3.5 % of the remainder as the base amount — then apply the municipality's multiplier.
  4. Step 6 of 10
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    Trade tax apportionment — which municipality gets what?

    The key is WAGES per establishment, not turnover — and they are rounded down to full 1,000 euros before the ratio is formed.
  5. Step 7 of 10
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    German trade tax prepayments — four dates, one quarter, at least EUR 50

    Each prepayment is a quarter of the trade tax from the last assessment, due on 15 February, 15 May, 15 August and 15 November. It is rounded down to whole euros and set only if it reaches EUR 50; the municipality may adjust it to the tax expected for the year.
  6. Step 8 of 10
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    German trade tax credit against income tax (EStG s. 35)

    The break-even is a municipal multiplier of 400 %: below it the trade tax is fully neutralised, above it the excess is a permanent cost. And the credit only offsets — it is never refunded.

File: trade tax return and allocation return

  1. Step 9 of 10
    FormFree45 min

    German trade tax return (GewSt 1 A)

    What you declare is the base amount, not the tax: why the tax office assesses and the municipality levies, when an apportionment declaration is added, and what the statutory 280 per cent multiplier really means. Guide, deadlines and worked example.
  2. Step 10 of 10
    FormFree45 min

    Apportioning the German trade tax base amount (GewSt 1 D)

    Two municipalities, two multipliers — and one base amount split according to WAGES. Why tax-free night supplements count, why a sole trader must enter 25 000 euros for themselves, and where the 50 000 euro per-employee cap bites. Guide and worked example.

The other paths

A different procedure, the same principle: the three pillars in order.

Read in German