Germany vs Ireland taxes (2026): 12.5%, trade tax and CGT

Germany vs Ireland tax rates at a glance

Tax	🇩🇪 Germany	🇮🇪 Ireland
Income tax	Basic allowance: EUR 12,348 Entry rate: 14% Top rate: 45% Solidarity surcharge: 5.5% Church tax: 8% / 9% Employee pension, unemployment, health and care contributions: Capped	Standard rate: 20% Higher rate: 40% Single standard-rate cut-off: About EUR 44,000 USC bands: 0.5% / 2% / 3% / 8% Employee PRSI: 4.2% then 4.35% Employer PRSI: About 9% / 11.25%+
Corporate tax	Corporation tax: 15% Solidarity surcharge: 5.5% Trade tax base rate: 3.5% Trade tax effective range: 7% - 20.3% DMTT / Pillar Two: 15%	Trading profits: 12.5% Passive / non-trading: 25% Company capital gains: 33% Pillar Two minimum: 15% Knowledge Development Box: Effective 10%
Capital gains tax	Securities gains tax: 25% Solidarity surcharge: 5.5% Church tax: 8% / 9% Saver allowance: EUR 1,000 / EUR 2,000 Private-sale holding period: 1 year / 10 years	Standard CGT: 33% Annual individual exemption: EUR 1,270 Certain funds / policies: 40% Corporate gains: Often 33%
Dividend tax	Dividend withholding tax: 25% Solidarity surcharge: 5.5% Church tax: 8% / 9% Annual saver allowance: EUR 1,000 / EUR 2,000	Dividend withholding tax: 25% Standard income tax on dividends: 20% / 40% USC on dividends: Often applies Non-resident relief: Treaty / exemption dependent
Wealth tax	Net wealth tax: 0% Net worth tax: 0% Annual asset tax: 0%	Net wealth tax: 0% Annual asset tax: 0% Local property tax: Applies
Inheritance / estate tax	Tax class I: 7% - 30% Tax class II: 15% - 43% Tax class III: 30% - 50% Tax-free allowances: EUR 20,000 - EUR 500,000	CAT rate: 33% Group A: EUR 400,000 free then 33% Group B: EUR 40,000 free then 33% Group C: EUR 20,000 free then 33% Spouse / civil partner: Generally exempt
VAT / GST / sales tax	VAT: 19% / 7%	VAT: 23%

Who wins on each tax

Personal income taxGermany

Germany's scale reaches 45% plus solidarity surcharge; Ireland's 20%/40% bands plus USC and PRSI often produce a similar or heavier employment result, so the German headline is not automatically worse.

Corporate taxIreland

Ireland taxes genuine trading profits at 12.5%, well below Germany's combined corporation and trade-tax burden of about 30%; Irish passive income is generally 25%.

Capital gains taxGermany

Germany generally taxes securities at 25% plus solidarity surcharge; Ireland's standard CGT is 33%.

Inheritance taxTie

Germany charges 7% to 50% after relationship allowances; Ireland charges CAT at 33% above thresholds. The heir class and asset mix decide which is heavier.

The verdict

Ireland's 12.5% trading corporation tax is the clearest company-side win, but it needs real Irish trade. Passive income is generally 25%, and IP or close-company structures without Irish substance do not get the low rate. German companies generally face 15.825% corporation tax plus municipal trade tax, often around 30% combined.

On personal investment income Germany is usually lighter: securities are generally 25% plus solidarity surcharge after a EUR 1,000 saver allowance, against Ireland's 33% CGT and dividend income stacked with USC. Employment is heavy in both systems once German social security or Irish USC and PRSI are included.

Choose Ireland for an operating or IP-using trade with local activity. Choose Germany for listed portfolios, a larger industrial market and the absence of CAT, while accepting wage-tax withholding and trade tax.

How to read this comparison

Ireland and Germany are both EU operating bases with serious payroll, which is why a founder comparison that stops at 12.5% versus 45% is incomplete. Ireland's advantage is the company. Trading profits are taxed at 12.5% when the company actually trades. Passive income is generally 25%. Pillar Two can lift large groups to a 15% minimum. Knowledge Development Box relief can improve qualifying IP income, but only with Irish development. German companies pay 15% corporation tax plus solidarity surcharge (15.825%) and municipal trade tax, which commonly produces a combined burden around 30%. That trade-tax layer is local, so two German municipalities are not the same bill.

Personal tax is closer and sometimes favours Germany. German income tax is 0% to 45% with a EUR 12,348 basic allowance, wage-tax withholding, solidarity surcharge and capped social security. Irish income tax is only 20% or 40% until USC and PRSI are added. For a well-paid employee the Irish stack is not a low-tax story. Investment income splits more clearly. Germany's Abgeltungsteuer is generally 25% plus surcharge after a EUR 1,000 saver allowance. Ireland uses 33% CGT and taxes many dividends as income plus USC after 25% DWT. VAT is 19%/7% in Germany and 23% in Ireland. Neither has a general net wealth tax.

Succession is not a free win for either side. German inheritance and gift tax is 7% to 50% after relationship-based allowances. Irish CAT is a flat 33% above those thresholds. Large family exemptions can make Germany gentler for close heirs; CAT can be harsher on the same transfer.

The constraint is substance. An Irish 12.5% claim on income that is really German-managed trade, captive IP or a close-company cash box will not hold. A German GmbH that exists to serve German customers should not be re-papered in Dublin without people. Choose Ireland for a real trade. Choose Germany for listed portfolios, industrial depth and wage-tax uniformity.

Which one fits you

🇩🇪 Choose Germany if you're a…

Listed-securities investors using Abgeltungsteuer
Operators who need Germany's industrial market
Employees on German wage-tax withholding

🇮🇪 Choose Ireland if you're a…

Trading companies with Irish substance
Groups developing IP in Ireland
Founders who will accept 33% CGT and CAT

Frequently asked questions

Is Ireland lower tax than Germany for a company?

Yes for genuine trading profits at 12.5% versus a German combined burden often near 30%. Irish passive income at 25% and German municipal trade-tax variation can narrow that gap, and the 12.5% rate still needs Irish substance.

Which country is better for investors?

Germany is usually lighter on listed securities at 25% plus surcharge. Ireland's 33% CGT and income-tax treatment of dividends plus USC are heavier for a straightforward portfolio.

Does Ireland have inheritance tax like Germany?

Ireland levies CAT at 33% above relationship thresholds. Germany uses a 7% to 50% inheritance and gift-tax scale after allowances. Neither is a no-tax succession system.