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Germany

Company Formation and Related Services

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Buying a European shelf company with VAT number

Whenever you need to start doing business immediately in a European country and you need a company with a VAT number, you don’t have to wait for the bureaucratic procedures.

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Partner Law Firms

We encourage you to contact our partner law firms in Bucharest: Rolegal and E&C, both part of our legal network.

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Tax Minimization Structures

BridgeWest is specialized in special corporate structures designed for tax minimization. No matter where you want to incorporate your company, you will need to consider how you can legally minimize costs.

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Paying Taxes in Germany

April 4, 2011, 5:27 pm
BridgeWest

 

1. What is the corporate tax in Germany?
Since the comprehensive reforms in 2001 and 2008 the tax system in Germany has been modified to better suit the country's economy. The corporate tax in Germany applies to a standard rate of 15%. In addition a business tax of 14% up to 17% is applied, being payable to the municipality. If the surcharge and trade taxes are allocated, the corporate tax rate may reach 30% or 33%.

 


2. What is the VAT in Germany?

According to German Tax Law the standard VAT rate is 19%. However in certain cases reductions can be made, the VAT of 7% been applicable on certain goods and services defined by law. 

 


3. How can the VAT be refunded in Germany?
The Value Added Tax or Umsatzsteuer of 19% applied to companies is deductible, as the tax is a transit item for entrepreneurs. The system is straight-forward and the entrepreneurs can choose their own refund period from the minimum period of three months and maximum of one calendar year. If the chosen period is one year, the minimum refundable amount is 1000 Euro. The EU members can choose to deposit the relevant documents electronically through the ELSTER system. In order to obtain the refund, a non EU company must submit an application to the German tax authorities. The application needs to be signed by the business owner personally. The refund is usually made by credit transfer to the bank account of the company within a maximum of 24 months after the claim.



4. What is the dividend tax in Germany?
Under German Tax Law taxable entities are subject to a dividend withholding tax of 25 %( 26.28% if the solidarity surcharge is applied). No taxes on dividends paid to by the companies under the EU parent/subsidiary are applicable.

 

5. What are the taxes rates applied on other payments?

The interests are taxed only if are related to the deposits made with the German banks of financial institutions. A tax of 25% is applicable in this case. The royalties paid to non-residents are taxed with 15% (15.83% if the solidarity surcharge is applied). There are no taxes on technical services fees or branch remittance taxes.


6. Are there any incentives for foreign investors in Germany?

Many foreign entrepreneurs choose to set business in Germany due to the thriving economy and the resources offered by the country. There are plenty of incentives in the form of programs designed to fit diverse economic activities. The government offers cash incentives for labor-related activities and research and development. Also Germany offers different grants and special loans for different business fields. The business environment is welcoming there is no discrimination against foreign companies compared to local companies.



7. Why do I need a local accountant for my German business?

German companies are subject to certain regulations. Accountants are needed for tax filings and other procedures. Even though the system is comprehensive and straight-forward local accountants offer a better understanding of the economic environment also having more experience in dealing with the financial needs of companies in any business sectors.

 

BridgeWest offers advice on how to open a company in Germany, including virtual office services, opening of bank accounts and accounting services.




Open Business in Germany
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Company Formation in Germany

Berlin

Bridgewest provides the following services for company formation in Germany:

- drawing up the articles of association that can be signed through power of attorney (German laws require powers of attorney for any public notary proceedin ... [More]

Lawyers in Germany

Berlin

BridgeWest provides a wide range of legal services in Germany through our affiliated German lawyers and Law Firms in Berlin, Munchen and other major cities in Germany. We are mainly specialized in the main aspects of German Commercial Law, includi ... [More]

Accounting Firm Germany

Berlin

BridgeWest provides accounting services in Germany through our affiliates in Berlin, Frankfurt, Munich and Germany’s other main cities. Our main areas of expertise include the following:

Accountancy & Book keeping in Germany ... [More]