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Doing business in Germany · Market guide · 02 of 11

Tax, accounting and statutory reporting in Germany

A German company pays corporate income tax at 15 percent, a 5.5 percent solidarity surcharge on that tax, and municipal trade tax whose rate depends on where it operates. The corporate rate falls by one point a year from 2028 to 10 percent from 2032. VAT is 19 percent standard and 7 percent reduced, and domestic B2B invoicing is moving to structured e-invoices, with transitional relief for issuers ending after 2026 or, for smaller businesses, after 2027. Corporations above the small-company limits need a statutory audit, and all must publish accounts through the company register.

Full guide · Source-checked research99% of statements checked against a source109 checked against an official source1 checked against a secondary sourceChecked 2026-10-18Not yet professionally reviewed

A German company pays corporate income tax at 15 percent, a 5.5 percent solidarity surcharge on that tax, and municipal trade tax whose rate depends on where it operates. The corporate rate falls by one point a year from 2028 to 10 percent from 2032. VAT is 19 percent standard and 7 percent reduced, and domestic B2B invoicing is moving to structured e-invoices, with transitional relief for issuers ending after 2026 or, for smaller businesses, after 2027. Corporations above the small-company limits need a statutory audit, and all must publish accounts through the company register.

Corporate income tax, solidarity surcharge and trade tax

Corporate income tax is 15 percent for assessment periods up to 2027 and is legislated to fall to 14, 13, 12 and 11 percent in 2028 to 2031 and to 10 percent from 2032. A solidarity surcharge of 5.5 percent is charged on the assessed corporate tax, so the federal charge is currently 15.825 percent of taxable income.

Trade tax is charged on top. The tax office applies a base rate of 3.5 percent to trade income, and the municipality multiplies the result by its own multiplier. The current statutory default where a municipality sets no higher rate is 280 percent, and the 2025 national average was 410 percent. At that average, trade tax equals 14.35 percent of trade income (3.5 percent x 410 percent), which is why location matters. Corporations do not get the EUR 24,500 trade tax allowance that individuals and partnerships receive.123456

VAT and the B2B e-invoicing phase-in

The standard VAT rate is 19 percent and the reduced rate for listed supplies is 7 percent. Businesses trading within the EU need a VAT identification number, which is issued under section 27a of the VAT Act.

For supplies between two businesses established in Germany, invoices must be structured e-invoices that meet the European standard; a PDF or paper invoice is an 'other invoice'. Every business has had to be able to receive e-invoices since 1 January 2025, and administrative guidance confirms there is no transition for receipt and that formats such as XRechnung and ZUGFeRD (from version 2.0.1, excluding the MINIMUM and BASIC-WL profiles) qualify. Invoices up to EUR 250 and travel tickets are exempt.

For issuing, other invoices remain allowed for supplies made in 2025 and 2026. For supplies made in 2027 they remain allowed only for businesses whose previous-year total turnover did not exceed EUR 800,000, or for invoices sent by EDI. From 2028 all domestic B2B invoices in scope must be e-invoices.7891011

Pillar Two and transfer pricing

German entities of groups with consolidated revenue of EUR 750 million or more in at least two of the four preceding years are subject to the minimum tax, regardless of tax treaties. The act applies to financial years beginning after 30 December 2023, and the undertaxed profits rule to financial years beginning after 30 December 2024, subject to an exception for some EU-parented groups.

Transactions with related parties must be documented, including a transaction overview and the basis for arm's-length pricing. A group-wide master file is required only where the German company's previous-year revenue was EUR 100 million or more.121314

Accounting, audit and publication

Corporations are classed as small, medium-sized or large by reference to balance sheet total, revenue and average employees, using a two-of-three test. A company is small if it stays within two of EUR 7.5 million, EUR 15 million and 50 employees. Medium-sized and large corporations must have their annual accounts and management report audited.

All corporations must transmit their annual accounts electronically to the company register (Unternehmensregister) within one year of the balance sheet date. Trade tax returns are filed electronically, and a state service description gives 31 July of the following year as the deadline where no tax adviser is involved.15161718

Key rates, thresholds and dates123456791110121315161714
ItemRule
Corporate income tax15% to 2027; 14% (2028), 13% (2029), 12% (2030), 11% (2031), 10% from 2032
Solidarity surcharge5.5% of assessed corporate income tax
Trade tax3.5% base rate x municipal multiplier; statutory default 280% where no higher rate is set; 2025 average 410%
VAT19% standard; 7% reduced for listed supplies
E-invoice receipt (domestic B2B)Required from 1 January 2025, no transition
E-invoice issue (domestic B2B)Other invoices allowed for supplies in 2025-2026; in 2027 only if prior-year turnover was EUR 800,000 or less, or by EDI; mandatory from 2028
Pillar TwoGroups with EUR 750m+ revenue in 2 of 4 prior years; financial years beginning after 30 December 2023
Statutory auditRequired unless small (within two of EUR 7.5m assets, EUR 15m revenue, 50 employees)
Transfer pricing master fileRequired if prior-year revenue was EUR 100m or more
Publication of accountsWithin one year of the balance sheet date, via the company register

How it works, step by step

  1. Obtain a VAT identification number if the business will trade with other EU member states8Federal tax administration
  2. Set up an inbound channel able to receive and process structured e-invoices910Company (no filing)
  3. File the annual trade tax return electronically; the municipality then applies its multiplier185Tax office and municipality
  4. Have the annual accounts audited if the company is medium-sized or large1516Statutory auditor
  5. Transmit the annual accounts to the company register within one year of the balance sheet date17Unternehmensregister

No timings or fees are shown unless an official source states them.

Documents usually needed

  • Annual financial statements and, for medium-sized and large corporations, management report and audit report
  • Transfer pricing records (transaction overview, transaction documentation and, where revenue is EUR 100m or more, master file)
  • Trade tax return filed electronically
  • Structured e-invoices (XRechnung, ZUGFeRD 2.0.1 or later, or another EN 16931-compliant format)
  • Pillar Two information for in-scope groups

Common mistakes

  • Budgeting on the 15 percent headline rate and leaving out the solidarity surcharge and municipal trade tax.
  • Assuming one national trade tax rate; multipliers vary by municipality and the 2025 average was 410 percent.
  • Treating a PDF as an e-invoice. Only a structured format meeting the European standard counts, and administrative guidance says an invoice that should have been an e-invoice does not support input VAT deduction until corrected.
  • Missing the twelve-month deadline to publish annual accounts.
  • Overlooking that German entities of large groups are directly subject to the minimum tax, whatever the parent jurisdiction's rules.

When the business crosses borders

  • The domestic e-invoice obligation applies where supplier and customer are both established in Germany; invoices to foreign customers fall outside it.
  • The minimum tax applies to German entities of in-scope groups regardless of tax treaties.
  • Related-party transactions with foreign group companies require transfer pricing documentation under the Fiscal Code.
  • Withholding tax on dividends, interest and royalties paid abroad, and treaty relief, must be checked separately; it was not confirmed.

Questions businesses ask

What is the combined tax rate on company profits?

Corporate income tax of 15 percent plus the 5.5 percent solidarity surcharge gives 15.825 percent. Trade tax is added at 3.5 percent multiplied by the municipal multiplier; at the 2025 average of 410 percent that is 14.35 percent of trade income. The trade income base differs from taxable income, so the total is an approximation.1346

Does every GmbH need an audit?

No. Only corporations that are not small need a statutory audit. A company is small if it stays within two of three limits: EUR 7.5 million balance sheet total, EUR 15 million revenue and 50 employees on average.1516

When must we start issuing e-invoices?

For domestic B2B supplies made from 1 January 2027, unless your previous-year turnover was EUR 800,000 or less or you invoice by EDI, in which case from 1 January 2028. You must already be able to receive e-invoices.1110

What this guide does not yet confirm

These points need checking with a qualified local professional in Germany before you rely on them.

  • Withholding tax rates on dividends, interest, royalties and services, refund procedures and the treaty network were not confirmed; the Income Tax Act pages could not be reached in the research window.
  • The first assessment period to which the 280 percent default trade tax multiplier applies was not confirmed (the application rule in § 36 GewStG could not yet be checked); earlier law used 200 percent.
  • Tax registration with the tax office, VAT return frequency and deadlines, and branch profit taxation were not reviewed.
  • Later Federal Ministry of Finance guidance updating the October 2024 e-invoicing circular was not reviewed, because the ministry's site blocks automated access.
  • Micro-company relief, trade tax add-backs and the planned e-invoice reporting system were not reviewed.

Sources and review status

Each statement is numbered to the source it was checked against. We use official sources where we can, and each statement says whether it was checked against an official or a secondary source. Sources last checked on 18 October 2026. None of it has been professionally reviewed yet: it is research checked against official and secondary sources by WONE Global, not legal or tax advice.

  1. Corporate income tax is 15 percent of taxable income for assessment periods up to and including 2027. Corporations subject to Körperschaftsteuer; solidarity surcharge and trade tax are charged in addition.

    Bundesministerium der Justiz / Bundesamt für Justiz (gesetze-im-internet.de) — § 23 KStG – Steuersatz · § 23 Abs. 1 KStG · Checked 18 October 2026 · Checked against an official source · Not yet professionally reviewed

  2. The corporate income tax rate falls to 14 percent for 2028, 13 percent for 2029, 12 percent for 2030, 11 percent for 2031 and 10 percent from 2032. Assessment periods (Veranlagungszeiträume) 2028 onwards; enacted law, not yet in effect.

    Bundesministerium der Justiz / Bundesamt für Justiz (gesetze-im-internet.de) — § 23 KStG – Steuersatz · § 23 Abs. 1 KStG · In force from 1 January 2028 · Checked 18 October 2026 · Checked against an official source · Not yet professionally reviewed

  3. A solidarity surcharge of 5.5 percent is levied on assessed corporate income tax. Base is assessed corporate income tax reduced by creditable or refunded corporate tax.

    Bundesministerium der Justiz / Bundesamt für Justiz (gesetze-im-internet.de) — Solidaritätszuschlaggesetz 1995 (SolzG 1995) · § 3 Abs. 1 Nr. 1 and § 4 SolzG 1995 · Checked 18 October 2026 · Checked against an official source · Not yet professionally reviewed

  4. Trade tax is assessed by applying a base rate (Steuermesszahl) of 3.5 percent to trade income; an allowance of EUR 24,500 applies only to individuals and partnerships. Gewerbesteuer; corporations receive no allowance under § 11 Abs. 1 Nr. 1.

    Bundesministerium der Justiz / Bundesamt für Justiz (gesetze-im-internet.de) — § 11 GewStG – Steuermesszahl und Steuermessbetrag · § 11 Abs. 1 Nr. 1 and Abs. 2 GewStG · Checked 18 October 2026 · Checked against an official source · Not yet professionally reviewed

  5. Each municipality entitled to levy trade tax sets its own multiplier (Hebesatz), which must be the same for all businesses in the municipality and is 280 percent where the municipality has not set a higher rate. Applies to the multiplier applied to the trade tax base amount; varies by municipality.

    Bundesministerium der Justiz / Bundesamt für Justiz (gesetze-im-internet.de) — § 16 GewStG – Hebesatz · § 16 Abs. 1 and 4 GewStG · Checked 18 October 2026 · Checked against an official source · Not yet professionally reviewed

    The current text states 280 percent; a footnote refers to § 36 GewStG for application, which could not yet be checked window. A Thuringian service description (fimportal.de) still shows the earlier 200 percent figure. Confirm the first assessment period to which 280 percent applies.

  6. The average trade tax multiplier across all German municipalities was 410 percent in 2025. National average; individual municipal multipliers differ.

    Statistisches Bundesamt (Destatis) — Gewerbesteuereinnahmen im Jahr 2025 um 1,5 % höher als im Vorjahr (Pressemitteilung) · Press release PD26_369_712 · Checked 18 October 2026 · Checked against an official source · Not yet professionally reviewed

  7. The standard VAT rate is 19 percent and the reduced rate, for listed supplies, is 7 percent. Umsatzsteuer; the reduced rate applies only to supplies enumerated in § 12 Abs. 2 UStG.

    Bundesministerium der Justiz / Bundesamt für Justiz (gesetze-im-internet.de) — § 12 UStG – Steuersätze · § 12 Abs. 1 and 2 UStG · Checked 18 October 2026 · Checked against an official source · Not yet professionally reviewed

  8. German VAT identification numbers are issued under section 27a of the VAT Act. Needed for intra-EU supplies and acquisitions.

    FIM-Portal (Föderales Informationsmanagement), entry approved by the Bundesministerium der Finanzen — Umsatzsteuer-Identifikationsnummer nach § 27a UStG (Leistungsschlüssel 99102022000000) · Leistungsbezeichnung; Handlungsgrundlage · Checked 18 October 2026 · Checked against an official source · Not yet professionally reviewed

  9. For supplies between businesses that are both established in Germany, the invoice must be an electronic invoice issued, transmitted and received in a structured format that complies with the European e-invoicing standard under Directive 2014/55/EU. Domestic B2B supplies; subject to the transitional rules in de-tax-009. Paper and unstructured electronic invoices are 'other invoices'.

    Bundesministerium der Justiz / Bundesamt für Justiz (gesetze-im-internet.de) — § 14 UStG – Ausstellung von Rechnungen · § 14 Abs. 1 and 2 UStG · In force from 1 January 2025 · Checked 18 October 2026 · Checked against an official source · Not yet professionally reviewed

  10. All businesses must be able to receive e-invoices for domestic B2B supplies from 1 January 2025 with no transitional period, while invoices up to EUR 250 and travel tickets are exempt from the e-invoice obligation. Administrative guidance; accepted formats include those compliant with EN 16931 such as XRechnung and ZUGFeRD from version 2.0.1 (excluding the MINIMUM and BASIC-WL profiles). An ordinary e-mail inbox is sufficient for receipt.

    Bundesministerium der Finanzen (published via Landesamt für Steuern Niedersachsen) — BMF-Schreiben vom 15. Oktober 2024 – Einführung der obligatorischen (verpflichtenden) E-Rechnung zum 1. Januar 2025 (III C 2 - S 7287-a/23/10001 :007) · Sections on receipt, exemptions and formats · In force from 1 January 2025 · Checked 18 October 2026 · Checked against an official source · Not yet professionally reviewed

    The ministry's own FAQ page blocks automated access; the circular was read from a state tax authority download. Later ministry guidance updating this circular may exist and was not reviewed.

  11. Paper or other non-structured invoices remain permitted for domestic B2B supplies made in 2025 and 2026; for supplies made in 2027 they are permitted only if the issuer's total turnover in the previous calendar year did not exceed EUR 800,000, or if the invoice is sent by EDI. Transitional rules for issuing invoices; non-paper other formats need the recipient's consent. No transition applies after 2027.

    Bundesministerium der Justiz / Bundesamt für Justiz (gesetze-im-internet.de) — § 27 UStG – Allgemeine Übergangsvorschriften · § 27 Abs. 38 UStG · In force from 1 January 2025 · Checked 18 October 2026 · Checked against an official source · Not yet professionally reviewed

  12. German entities of groups whose ultimate parent reports annual revenue of EUR 750 million or more in at least two of the four preceding financial years are subject to the minimum tax (Pillar Two), regardless of tax treaties. Mindeststeuergesetz; joint ventures are also covered; threshold prorated for short or long financial years.

    Bundesministerium der Justiz / Bundesamt für Justiz (gesetze-im-internet.de) — § 1 MinStG – Steuerpflicht · § 1 Abs. 1 MinStG · Checked 18 October 2026 · Checked against an official source · Not yet professionally reviewed

  13. The minimum tax act first applies to financial years beginning after 30 December 2023, and its undertaxed profits rule (§ 11) to financial years beginning after 30 December 2024. The UTPR start does not apply to groups whose ultimate parent is in an EU member state that used the Article 50(1) deferral option of Directive (EU) 2022/2523.

    Bundesministerium der Justiz / Bundesamt für Justiz (gesetze-im-internet.de) — § 101 MinStG – Anwendungsvorschriften · § 101 Abs. 1 and 2 MinStG · In force from 31 December 2023 · Checked 18 October 2026 · Checked against an official source · Not yet professionally reviewed

  14. Taxpayers must keep transfer pricing records for transactions with related parties, and the group-wide master file (Stammdokumentation) is required only where the company's revenue in the previous financial year was EUR 100 million or more. Cross-border related-party transactions within the meaning of § 1 Abs. 4 AStG.

    Bundesministerium der Justiz / Bundesamt für Justiz (gesetze-im-internet.de) — § 90 AO – Mitwirkungspflichten der Beteiligten · § 90 Abs. 3 AO · Checked 18 October 2026 · Checked against an official source · Not yet professionally reviewed

  15. A corporation is small if it does not exceed two of three limits (balance sheet total EUR 7.5 million, revenue EUR 15 million, average 50 employees) and medium-sized if it exceeds two of these but not two of EUR 25 million, EUR 50 million and 250 employees; above that it is large. Size classes under the Commercial Code; capital-market-oriented companies are always large.

    Bundesministerium der Justiz / Bundesamt für Justiz (gesetze-im-internet.de) — § 267 HGB – Umschreibung der Größenklassen · § 267 Abs. 1 to 3 HGB · Checked 18 October 2026 · Checked against an official source · Not yet professionally reviewed

  16. The annual financial statements and management report of corporations that are not small must be audited by a statutory auditor. Kapitalgesellschaften (including GmbH) exceeding the small-company limits in § 267 Abs. 1 HGB.

    Bundesministerium der Justiz / Bundesamt für Justiz (gesetze-im-internet.de) — § 316 HGB – Pflicht zur Prüfung · § 316 Abs. 1 HGB · Checked 18 October 2026 · Checked against an official source · Not yet professionally reviewed

  17. Annual accounts must be transmitted electronically to the body operating the company register (Unternehmensregister) no later than one year after the balance sheet date. Disclosure duty of corporations; scope of documents depends on size class.

    Bundesministerium der Justiz / Bundesamt für Justiz (gesetze-im-internet.de) — § 325 HGB – Offenlegung · § 325 Abs. 1 and 1a HGB · Checked 18 October 2026 · Checked against an official source · Not yet professionally reviewed

  18. Trade tax returns must be filed electronically, and are due by 31 July of the following year where no tax adviser is involved. Described in a state service entry (Thuringia); the municipality then applies its multiplier and collects the tax.

    FIM-Portal (Föderales Informationsmanagement), service description supplied by Thüringen — Gewerbesteuer bezahlen (Leistungsschlüssel 99102010002000) · Sections 'Verfahrensablauf' and 'Fristen' · Checked 18 October 2026 · Checked against an official source · Not yet professionally reviewed

    The service description also gives a later deadline where a tax adviser files; confirm the deadline for the specific year.

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