Corporate Income Tax Act (Germany)

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Basic data
Title: Corporate Income Tax Act
Abbreviation: KStG
Type: Federal law
Scope: Federal Republic of Germany
Legal matter: Tax law
References : 611-4-4
Original version from: March 30, 1920
( RGBl. I p. 393)
Entry into force on: April 15, 1920
New announcement from: October 15, 2002
( BGBl. I p. 4144)
Last change by: Art. 6 G of December 21, 2019
( Federal Law Gazette I p. 2875, 2884 )
Effective date of the
last change:
January 1, 2020
(Art. 10 G of December 21, 2019)
GESTA : D048
Please note the note on the applicable legal version.

The Corporate Income Tax Act ( KStG ) regulates the taxation of the income of legal entities in Germany by means of corporate income tax .

It is currently valid in the version published on October 15, 2002.


The corporate income tax law is divided into six parts.

  • First part: tax liability
    • § 1 Unlimited tax liability
    • § 2 Limited Tax Liability
    • § 3 Delimitation of the tax liability in the case of non-legally competent associations of persons and estates as well as real communities
    • § 4 Businesses of a commercial nature of legal persons under public law
    • § 5 Exemptions
    • § 6 Restrictions on the exemption from pension, death, health and support funds
  • Part two: income
  • Third part: tariff
  • Fourth part: Contributions not made in the nominal capital and formation and assessment
  • Fifth part: authorization and final provisions
  • Sixth part: Special provisions for the transition from the credit system to the half-income system

First part: tax liability

Sections 1–6 regulate the tax liability for corporation tax , d. H. which persons are generally subject to taxation or are explicitly exempt from corporation tax with which income and under which circumstances.

Corporations and mutual insurance associations are essentially subject to unlimited corporation tax , provided that their management or their headquarters are in Germany (so-called tax residents ).

Part two: income

The determination of the assessment base (taxable income) is standardized in Sections 7–22. The corporation tax law initially falls back on the income determination regulations of the income tax law. In addition, the law contains supplementary standards on shareholder debt financing (Section 8a), participations in other corporations (Section 8b), loss deduction (Section 8c) to determine the income in cases of tax unity and the special features of insurance companies.

Third part: tariff

The rate of a tax determines how the tax is calculated from the previously determined assessment base . The so-called tariff regulations usually regulate the tax rate and the allowance to be granted .

The corporate income tax rate is 15% (2008) of taxable income . Exemptions are only granted in corporation tax under the special cases of Sections 24 and 25. This mainly applies to mutual insurance companies .

Fourth part: Contributions not made in the nominal capital and formation and assessment

The contributions not made in the nominal capital are managed as a tax contribution account . As a result, the law differentiates between amounts that remain tax-free on repayment and profits that are taxed on distribution.

Individual evidence

  1. Corporate Income Tax Act of March 30, 1920.

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