Tax system and taxes in Germany Made by

Tax system and taxes in Germany Made by 2 nd year students Management department Kuznetsova Elena Polozova Ekaterina Siliutina Daria Shtepina Marina

Content Tax system Income tax Corporate tax Value added tax Real estate tax Excise duties Solidarity surgery Church tax References

Tax system Main taxes Others • Solidarity Surcharge (Solidaritätszuschlag) Federal taxes • Excise duties (tobacco, alcohol) State taxes • • • Income tax (Einkommnsteuer) Corporations tax (Koerperschaftsteuer) Value added tax (Mehrwertsteuer/Umsatzsteuer) Local taxes • • • Trade tax on income (Gewerbesteuer) Inheritance/gift tax (Erbschaftsteuer und Schenkungssteuer) Real estate tax (Grunderwerbsteuer) Church tax (Kirchensteuer)* • Land cess (Grundsteuer) • Car tax (KFZ-Steuer) *there is no applicable form for that tax among mentioned

Income tax Subjected to income tax are: Øincome from business operations Øincome from self-employed work Øincome from agriculture and forestry Øincome from employed work Øcapital yields Øincome from letting property A progressive tax: The more you earn – the higher your rate Annual Income Tax rate up to € 8 652 0% € 8 653 – € 53 665 14% € 53 666 – € 254 446 42% over € 254 447 45% Øother income Deductions that can lower income tax: ü children under 18 (or under 27 if still attending school and without earnings) ü specified insurance premiums ü charitable and political contributions to German entities up to certain limits ü unavoidable extraordinary expenses above a certain limit (such as illness)

Corporations tax All p ro taxe fits are d Is applicable exclusively to corporations (Gmb. H, AG, UG), per at 15 cen t cooperatives and foreign corporations (Limited, PLC, etc. ) with business premises in Germany. Taxation is independent of whether the profits remain in the company (accumulation) or are distributed. In addition to the corporate tax, 5. 50 percent solidarity surcharge is added to the fixed corporate tax. Calculations: Adjusted profit – exempt income – investment grant + dividends – constructive equity contributions + non-deductible expenditures – losses = taxable income Taxable income * tax rate = assessed tax w wo su ch ta xe s very corporate

Value added tax 19% 7% 0% • The normal VAT rate is just below the European average • Applies to certain consumer goods and everyday services (such as food, newspapers, local public transport, and hotel stays) • Applies to bank and health services, community work, cultural services provided to the public

The obligation to pay this tax arises for the following types of property Immovable property The share of participation Inheritance/gift tax Company’s property (tangible assets) Mortgage Is paid in the case of free transfer Acquisition on the occasion of death has to be paid by the tax from the inheritance Minimum amount of the inheritance which is not taxable should also be taken into account The amount of tax is calculated on the basis of the value of the transmitted object, the degree of the heir’s or donee’s kinship.

Real estate tax are charged from a variety of real estate transactions: Combinations of at least 95% share of the business association Acquisition of the immovable property Changes of the owners Combinations of at least 95% share of the business association The real property tax burden is calculated by multiplying: ◦ the assessed value of the real property ◦ the real property tax rate ◦ the municipal multiplier

Excise duties 136 EUR per hectoliter sparkling wine 51 EUR per hectoliter per still-sparkling wine (<8. 5 %) • • Wine • • Beer Tobacco Alcoholic beverages Cigarettes 82. 70 EUR per 1000 pieces Cigars and Cigarillos 14 EUR per 1000 pieces Fine cut smoking tobacco 34. 06 EUR per 1000 pieces Other smoking tobacco 15. 66 EUR per 1000 pieces Ethyl alcohol Intermediate beverages Fermented beverages • • • under 5 000 hl – 0. 4407 EUR per ht/degree Plato under 10 000 hl – 0. 5288 EUR per ht/degree Plato under 20 000 hl – 0. 6170 EUR per ht/degree Plato under 40 000 hl – 0. 6610 EUR per ht/degree Plato 1303 EUR per ht of pure alcohol the reduced rate is 730 EUR per ht 153 EUR per ht of product (from 15 % to 22 % vol) 136 EUR per ht of product (up 15 % vol). 136 EUR per ht 51 EUR per ht by other still fermented beverages (< 8. 5 %)

Solidarity Surcharge a government-imposed tax levied in an attempt to provide funding towards theoretically unifying (or solidifying) projects ◦ an additional fee on income tax, capital gains tax and corporate tax ◦ solidarity surcharge is to be paid by every natural and legal person Period Rate 1 July 1991 – 30 June 1992 7. 5 % 1 July 1992 – 31 December 1994 0. 0% 1995 – 1997 7. 5 % 1998 – present 5. 5 %

Land cess For property of individuals and legal entities The tax rate is 1. 2% Two types of land taxes: The tax rate: For enterprises of agriculture and forestry For the land, regardless of it’s affiliation 1) Centrally installed 2) Community premium

Car tax Depends on: • Car weight • Engine power • Type of engine (petrol/diesel) • CO 2 emissions Type Euro 4 Euro 3 3 -liter cars D 3 Euro 2 Euro 1 Other vehicles permitted to operate during ozone alarm Other motor cars Petrol 6. 75 7. 36 15. 13 21. 07 Diesel 15. 44 17. 25 28. 55 33. 29 25. 36 37. 58

Church tax ◦ Is imposed on members of some religious congregations ◦ To get out of paying tax one can leave the church ◦ The money goes to local churches to support religious hospitals and schools, and to the Vatican 8 -9%

References ◦ Business Development Corporation. German Tax System [Report]//Lubeck. – 2005. – p. 6 ◦ Efimova E. G. , Pospelova E. B. Taxes and tax system [Book]//M: 2014. – p. 235 ◦ Popova L. V. Countries` taxes [Book]//M: 2008. – p. 376 ◦ Corporatepartner. Taxes in Germany [Electronic resource]: URL: http: //www. cleverinvest. ru/nalogooblozhenie/nalogi-v-germanii. php (5. 02. 17)