Germany taxes corporate residents on worldwide income. Corporate profits are generally subject to a 15% corporation tax plus a 5.5% solidarity surcharge on that tax, resulting in a combined rate of 15.825%, and trade tax generally ranging from 8.75% to 20.3% depending on the municipality. Capital gains are generally subject to the ordinary corporate tax rules. Quarterly instalments are generally due on 10 March, 10 June, 10 September, and 10 December, while the annual corporate income tax return is generally due on 31 July, with extensions possible when a professional tax advisor is engaged. The general VAT rate is 19%. OECD baseline data indicates a composite effective average tax rate of 26.59 and a composite effective marginal tax rate of 11.00 for Germany. PwC also notes legislative changes adopted in 2025 under which the corporation tax rate is planned to decrease gradually from 2028 to 2032.
Germany Tax Brief
Time of Update 4/02/2026
Germany Corporate Income Tax (CIT)
Germany Withholding Tax (WHT)
Germany Value-Added Tax (VAT)
Germany Capital Gain Tax (CGT)
Germany Effective Tax Rate (ETR)
Composite Effective Marginal Tax Rate:
11.00
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TKEG Expat™ (Test) Germany Corporate Tax Guide
1.
Germany Corporate Income Tax
[b]Standard Corporate Income Tax (CIT) Rate: [/b]
Corporate tax is levied at a flat rate of 15%, followed by a surcharge of 5.5% on the amount paid (union surcharge). This gives the total tax rate to 15.825%.
Corporate tax is levied at a flat rate of 15%, followed by a surcharge of 5.5% on the amount paid (union surcharge). This gives the total tax rate to 15.825%.
2.
Germany VAT
[b]VAT:[/b] The standard VAT rate is 19%, with a reduced 7% rate for certain supplies and a 0% rate for certain photovoltaic systems and related devices. Preliminary VAT returns are generally filed monthly or quarterly by the 10th day of the following month. Monthly filing generally applies where prior-year VAT payable exceeded EUR 9,000, while taxpayers may be relieved from preliminary filings if prior-year VAT payable did not exceed EUR 2,000. Additional reporting may apply for intra-EU cross-border transactions, and domestic B2B e-invoicing has been introduced with transitional rules from 2025.
3.
Germany labor tax
[b]Payroll tax and social security:[/b] Employers must withhold payroll tax from employee remuneration and remit it to the tax office, usually monthly. Social security generally covers pension, unemployment, health care, nursing care, and accident insurance. From 1 January 2025, the main rates are 18.6% for pension, 2.6% for unemployment, 14.6% plus an average 2.9% supplement for statutory health insurance, and 4.2% for nursing care, while accident insurance is borne by the employer. Employees with annual earnings above EUR 77,400 (2026) may opt out of statutory health and nursing care insurance if privately insured.
4.
Germany import and export duties
[b]Customs duties:[/b] Germany applies the EU common customs system. Many imports from EU candidate countries and certain partner countries may benefit from a 0% customs rate, while manufactured goods from other countries are generally taxed at 0% to 15% based on import value. Countervailing duties may apply to certain imports and can exceed 15%. PwC also notes ongoing customs developments, including digitalisation, sanctions-related compliance, and proposed EU customs reforms.
5.
Environmental taxes
[b]Environmental taxes:[/b] Germany does not generally impose a standalone environmental tax. According to PwC, environmental elements are mainly built into excise taxes, and air passenger duty is the main tax specifically linked to pollution.
