How corporate tax works in Germany
Germany taxes corporate residents on worldwide income. In addition to corporation tax, most businesses also pay trade tax, which is a local business tax based on the municipality’s multiplier.
The federal corporation tax rate is 15%, plus 5.5% solidarity surcharge. Trade tax adds roughly 8.75% to 20.3% in many larger municipalities, so the combined effective burden is commonly around 30%.
Large multinational groups can also face Germany’s minimum tax regime. Dividends, real estate holdings, financing and transfer pricing can all matter in the real world, not just the headline rate.
Tax rates at a glance
- Corporation tax
- 15%Federal
- Solidarity surcharge
- 5.5%
- Trade tax base rate
- 3.5%
- Trade tax effective range
- 7% - 20.3%
- DMTT / Pillar Two
- 15%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
FoundersHolding companiesRegional operatorsInvestorsCross-border groups
Watch out for
- A 0% or 15% federal rate is not the whole story. Trade tax is local, and it can make the actual corporate burden much higher.
- The enacted Investment Booster Act keeps the rate at 15% through 2027, then reduces it by one percentage point each year from 2028 to 10% from 2032. Trade tax remains local.
- VAT, payroll tax, social security, real estate transfer tax and transfer-pricing rules still matter for most operating companies.
- Real estate-heavy structures should watch share-deal transfer-tax thresholds.
Frequently asked questions
Does Germany have corporate tax?
Yes. The federal corporation tax rate is 15% plus solidarity surcharge, and trade tax is added locally.
What is the total corporate tax rate in Germany?
It depends on the municipality, but the combined burden is often around 30% once trade tax is included.
Are dividends from a German company taxed?
Yes. Dividends can be subject to withholding tax, and the shareholder’s own tax treatment then depends on whether the recipient is an individual or company and where they are resident.