Corporation tax (GDR)
In the GDR , corporate income tax was a tax on private corporations . It served to oust these private corporations. Since this largely succeeded - at the end of the GDR there were almost no more private corporations - it only played a marginal role in terms of tax revenue. In the end, it was applied almost exclusively to purchasing and delivery cooperatives for the craft sector and foreign business assets under state supervision.
Tax liability
As in the Federal Republic of Germany, a distinction was made between unlimited and limited tax liability . Corporations with headquarters or management in the GDR were subject to unlimited corporation tax:
- Corporations
- Trade and business cooperatives (these were subject to significantly lower tax rates). Socialist cooperatives were not subject to tax.
- Mutual insurance associations
- other legal persons under civil law
- Non-legal associations, institutions, foundations and special-purpose funds
- Commercial establishments of legal persons that were themselves exempt from corporation tax
However, publicly owned companies that had the legal form of a GmbH or stock corporation due to contacts with western countries , such as Interflug , Mitropa or the companies in the area of commercial coordination, did not pay corporation tax, but the taxes customary in the state-owned economy such as the net profit transfer . There was no legal basis for this, this procedure was based on an unpublished Council of Ministers decision from the 1960s.
Corresponding organizations that had neither their headquarters nor management in the GDR were subject to limited corporation tax. Here only the profit made in the GDR was taxed.
The following were not subject to corporation tax:
- Parties and their societies
- “Democratic organizations” as determined by the Minister of Finance
- Corporations or organizations that directly and exclusively served church, non-profit or charitable purposes
Tax rates and double taxation
| income | mark | plus% | of the amount over marks |
| 0-720 | 0 | 0% | 0 |
| 720-840 | 5 | 8th % | 720 |
| 840-1.200 | 14.60 | 16.5% | 840 |
| 1,200-2,400 | 74 | 20% | 1,200 |
| 2,400-3,600 | 314 | 25% | 2,400 |
| 3,600-4,800 | 414 | 28% | 3,600 |
| 4,800-6,000 | 950 | 36% | 4,800 |
| 6,000-7,200 | 1,382 | 45% | 6,000 |
| 7,200-9,000 | 1,922 | 50% | 7,200 |
| 9,000-13,200 | 2,822 | 56% | 9,000 |
| 13,200-18,000 | 5,174 | 64% | 13,200 |
| 18,000-24,000 | 5,174 | 72% | 18,000 |
| 24,000-60,000 | 12,566 | 86% | 24,000 |
| 60,000-100,000 | 43,526 | 87% | 60,000 |
| 100,000-150,000 | 78,326 | 91% | 100,000 |
| 150,000-200,000 | 123,826 | 92% | 150,000 |
| 200,000-250,000 | 169,826 | 93% | 200,000 |
| from 250,000 | 216,326 | 95% | 250,000 |
The main reason for the effect of the tax was the confiscatory tax rates in connection with double taxation of profits . The top corporate income tax rate was 95%.
The distributions of the corporations were subject to income tax for the shareholders . A (even only partial) crediting of the corporation tax or tariff reduction (see corporation tax systematics ) did not take place, so that the distributed profits were fully subject to double taxation.
There was also further double taxation due to the fact that remuneration paid to members of the supervisory board or members of other control bodies was not allowed to be recognized by the company as costs, but was recognized as income for the members of the supervisory board.
Minimum and flat rate taxation
A regulation on minimum taxation meant that even companies that made small profits or losses had to pay corporation tax. As a substitute assessment basis for the minimum taxation, the sum of the dividends (if they exceeded 4% of the share capital) plus the remuneration for the supervisory board (or other control bodies) and the salaries of the executive board (if they were disproportionate to their work) was used.
The finance department at the Council of the District (this corresponded to the function after the tax office ) could set the tax as a flat rate in the event of disproportionate or insignificance.
After the turn
After the turnaround , market economy reforms were carried out, which also included a corresponding tax law. The People's Parliament decided on 6 March 1990 (ie before the first democratic parliamentary elections in 1990 ), the Law amending the legislation on income, corporation tax and wealth tax . On March 16, 1990, the relevant implementing regulation was issued. The key points were a significant reduction in tax rates and the introduction of a rate of 36% for distributed profits in order to limit double taxation.
The new basic tax rate B was:
| income | mark | plus% | of the amount over marks |
| 0-2,400 | 0 | 0% | 0 |
| 2,400-30,000 | 0 | 20% | 2,400 |
| 30,000-40,000 | 5,520 | 25% | 30,000 |
| 40,000-50,000 | 8,020 | 30% | 40,000 |
| 50,000-60,000 | 11,020 | 38% | 50,000 |
| 60,000-70,000 | 14,820 | 45% | 60,000 |
| 70,000-80,000 | 19,320 | 52% | 70,000 |
| 80,000-90,000 | 24,520 | 58% | 80,000 |
| 90,000-100,000 | 30,320 | 63% | 90,000 |
| 100,000-200,000 | 36,320 | 63.4% | 100,000 |
| more than 200,000 | 50% | total |
literature
- Sandra Duda: The tax law in the state budget system of the GDR. Diss., 2010, ISBN 9783631613054 , especially pp. 168-173.
- Ingo Müssener: The tax and duty system of the GDR in the transition from a planned economy to a market economy. 1990, ISBN 3-503-02925-7 , pp. 18, 24-25.
Laws
- Corporate Income Tax Act (KöStG), of September 18, 1970 (Journal of Laws No. 671 of November 2, 1970), amended by the Tax Amendment Act of March 6, 1990.
- Tax Code (GDR) of September 18, 1970.