Taxes and Accounting in Germany
- Tax Year
- The tax year begins on 1 January and finishes on 31 December of the same year.
- Accounting Standards
- Accounting priciples and regulations in Germany are in the "German Accounting Standards" - GAS (Deutsche Rechnungslegungs Standards - DRS) which are published by the German standardization bureau: the Deutsches Rechnungslegungs Standards Committee ( DRSC). There is no compulsory official accounting plan in Germany. It is up to each company to choose the form, the language and the currency. European companies listed on the stock exchange must establish their annual consolidated accounts on the basis of the IAS/IFRS standards.
- Accounting Regulation Bodies
- Accounting Reports
- Unlimited liability companies and partial liability companies (Einzelkaufleute, OHG, KG) must draw up the following accounting documents:
- a balance sheet (Bilanz) in the format decreed by the 4th European Directive of 1978, adapted to German law in 1985;
- a profit and loss account (Gewinnund Verlustrechnung).
Limited liability companies (Gmbh and AG) must add to the two documents above:
- notes to the accounts (Anhang);
- an annual report (Lagebericht).
The financial flow table or cash flow table is not obligatory, except for companies listed on the stock exchange.
- Publication Requirements
- The obligations of companies relative to the reporting of their accounts depend on their legal form: small company, medium company and large company (defined according to the total of the balance sheet, the net turnover and the members of staff employed).
Limited liability companies (Gmbh et AG), with the exception of small companies and groups of companies, must publish annual accounts and have them controlled by an outside auditor. On the other hand, unlimited liability companies (except KGaA) have no obligation to publish their accounts nor to have them audited.
- Professional Accountancy Bodies
WPK - Wirtschaftsprüferkammer , Chamber of Auditors.
IDW - Institut der Wirtschaftsprüfer , Institute of Chartered Accountants
- Certification and Auditing
- The preparation of the annual accounts must take place less than three months after the end of the financial year for medium and large companies, and less than six months later for small companies.
Vous pouvez contacter un auditeur externe : Price Waterhouse Coopers ; Ernst & Young (en allemand); KPMG (en anglais) ; Deloitte & Touche (en anglais)
- Accounting News
International Accounting News on Germany
- Nature of the Tax
- Value Added Tax (VAT) called Umsatzsteuer (USt)
- Tax Rate
- Reduced Tax Rate
- A reduced rate of 7% is applied to food, public transport, books and magazines and other products.
No rate is applied to exports.
- Other Consumption Taxes
- Company expenses are also subject to VAT (Vorsteuerabzug) at the rate of 19%. For more information refer to the German investement promotion agency.
- Company Tax
- The standard rate is 15%.
The effective corporate tax rate including trade tax and solidarity tax (5.5%) is about 30-33%.
- Tax Rate For Foreign Companies
- Resident and non-resident companies are charged in the same way concerning consumption tax.
- Capital Gains Taxation
- For capital gains on asset disposal, there is a single tax rate of 15% (+ a surcharge of 5.5%).
Capital gains from share transfer in resident and non-resident subsidiaries are exempt from corporate tax up to 95%, whatever the stock and the length of time it has been held.
- Main Allowable Deductions and Tax Credit
- Companies can carry forward their former loss limited to EUR 511,500. Furthermore, they can carry forward their loss on the payment of interests which is deductible up to 30% of the EBITDA (Profits before interest, tax, depreciation and amortization).
- Other Corporate Taxes
- In addition to federal and lander taxes, municipal taxes apply, at varying rate from one municipality to the other.
|Personnal Income Tax||Progressive rate from 15% to 42%|
|From EUR 0 to 7,665||0%|
|From EUR 7,665 to 12,739||Progressive rate from 15% and 23.9%.|
|From EUR 12,740 to 52,151||Progressive rate from 23.9% to 42%.|
|Beyond EUR 52,151||42%|
|A surcharge must be added. It concerns a solidarity contribution.||5.5% of the amount of the taxable income.|
- Allowable Deductions and Tax Credit
- Insurance bonuses, education and training expenses, retirement expenses, alimony, donations and expenses related to disability are deductable.
- Special Expatriate Tax Regime
- Germany has signed avoidance of double taxation agreements with many countries in the world. For more information refer to the Ministry of Finance (German only).
Double Taxation Treaties
- Countries With Whom a Double Taxation Treaty Have Been Signed
Centre for German Legal Information (CGerLI)
- Withholding Taxes
- Dividends: 25%, Interest: 0%, Royalties: 20%
- National Organizations
- The organization responsible for the protection of intellectual property in Germany is the Deutsches Patent- und Markenamt (DPMA).
- Regional Organizations
- For the protection of patents:
The European Patent Office.
Governing trade marks, designs and models: The Office for Harmonization in the Internal Market.
- International Membership
Member of the
WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)
National Regulation and International Agreements
|Type of property and law||Validity||International Agreements Signed|
PatAnwO (Patent Anwalts Ordnung)
|Initial 3 year period of validity
|| Patent Cooperation Treaty (PCT)
Strasbourg agreement Concerning the International Patent Classification
|10 year period of validity|| Trademark law treaty
Protocol relating to the Madrid Agreement
|70 years after the death of the author.|| Berne convention
Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms
Rome ConventionFor the Protection of Performers, Producers of Phonograms and Broadcasting Organizations
WIPO Copyright Treaty
- Independence of Justice
- Judicial power in Germany is independent.
- Equal Treatment of Nationals and Foreigners
- Germany is a constitutional State. Foreign nationals can always benefit from the same treatment as that reserved for citizens in legal matters.
- The Language of Justice
- The legal language is German.
- Recourse to an Interpreter
- Sources of the Law and Legal Similarities
- The main source of the law is the constitution of May 1949 known as the fundamental law which has also become the constitution of reunified Germany. The country's judicial system is based on a system of civil law bringing together indigenous concepts and judicial revisions of different legislative acts by the Federal Constitutional Court. Germany has not accepted the obligatory jurisdiction of the ICJ. As it is part of the European Union, its national law is bound to submit to the conditions of Community legislation.
- Checking National Laws Online
German Law Journal
German Official Gazette
German Official Gazette via Makrolog.de
Ministry of Justice Database
Deutsche Anwalt Portal
- National Standards Organizations
German Institute for Standardization
DKE German Commission for Electrical, Electronic & Information Technologies of DIN and VDE
Association for Electrical, Electronic &Information Technologies
- Integration in the International Standards Network
- At the European level:
- CEN, European Committee for Standardization
- CENELEC, European Committee for Electrotechnical Standardization
- European Telecommunications Standards Institute (ETSI)
- Classification of Standards
- CE, DIN, ISO
- Online Consultation of Standards
- Certification Organizations
German Institute for Standardization
ISO International Organization for Standardization
- General Information
German Business Etiquette
German Business Portal
- Opening Hours and Days
- Saturday and Sunday are not working days. On Friday afternoons, companies often close about 3 to 4 pm.
|New Year's Day||1st January|
|Epiphany (Bade-Wurtemberg, Bavaria and Saxony-Anhalt)||6 January|
|Good Friday||March or April|
|Easter Monday||March or April|
|Labor Day||1st May|
|Ascension||the sixth Thursday after Easter|
|Whit Monday||the seventh Monday after Easter|
|Corpus Christi (Bade-Wurtemberg, Bavaria, Hesse, North Rhine Westphalia, Rhineland Palatinate, Saarland and Thuringe in places where the majority of the population is Catholic)||Sixty days after Easter|
|Assumption (Bavaria (in places where the majority of the population is Catholic) and Saarland)||15 August|
|German Unification Day||3 October|
|Reformation Day (Brandenburg, Mecklenburg-Western-Pomerania, Saxony-Anhalt, Saxony, Thuringe)||31 October|
|All Saints (Bade-Wurtemberg, Bavaria, North Rhine Westphalia, Rhineland Palatinate, Saarland)||1st November|
|Day of fasting and prayer (Saxony)||November|
|1st day of Christmas||25 December|
|2nd day of Christmas||26 December|
Periods When Companies Usually Close
|Christmas holidays||from the end of December to the beginning of January|
|Easter holidays||from Good Friday to Easter Monday|
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