Corporate taxation

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Corporate taxation refers to the totality of taxes to which companies are subject.

Corporate taxation in Germany

The German system of corporate taxation distinguishes between three main types of tax:

Taxation of Income

Main types of tax: income tax , corporation tax , trade tax , solidarity surcharge

The legal regulations on income taxation in Germany are determined by the distinction between taxation in the sense of the principle of transparency and taxation in the sense of the principle of separation .

Sole proprietorships and partnerships are taxed transparently, profits and other income are subject to the partner's income tax.

Income from corporations is subject to the separation principle, profits are subject to corporation tax. It is paid by the corporation. Distributions are subject to the respective income tax for the recipient of the distribution, while they are not deductible for the corporation. Overall, this results in a higher burden than with partnerships with income taxes ( economic double taxation ). This effect is reduced by further regulations. The burden of corporation tax (and trade tax), viewed in isolation, is lower than the burden of the individual income tax rate for other traders. If the recipient is personally liable for income tax, the partial income method is generally to be applied to the remuneration distributed to him . If the shares of the recipient subject to income tax are in private assets, taxation takes place at the final withholding tax rate . If the shareholder is a corporation, the distributions are tax-free with the exception of 5% of non-deductible business expenses under certain conditions ( corporation tax privilege ). Another way of countering economic double taxation is through corporate tax unity . However, none of the regulations completely prevent economic double taxation. Therefore, German tax law is not legally neutral.

If income is generated from commercial operations in the course of the company's activities in Germany , additional business tax must be paid. As municipal tax, this is an essential aspect of national tax competition within Germany.

A solidarity surcharge is levied on income and corporation tax.

Taxation of Consumption

Main types of tax: sales tax , real estate transfer tax

The sales tax is not raised with the company, but is economically by the end user to carry. Due to the input tax deduction, companies only pay sales tax based on their own added value .

The real estate transfer tax is levied when purchasing property in Germany.

In addition, other consumption taxes may apply , which can be significant depending on the industry (e.g. beer tax , coffee tax ).

Taxation of the substance

Main types of tax: property tax , inheritance tax and gift tax

The property tax is a local tax on the ownership of land levied.

The inheritance and gift tax falls on an inheritance or donation to. This is also the case when entire companies or company shares are inherited or given away.

Aspects of international corporate taxation

Double taxation

In order to reduce the tax disadvantage of companies with cross-border activities, agreements to reduce double taxation have been agreed between many countries . These are usually based on the OECD model convention .

Tax competition

International tax competition between countries with low corporate tax rates aims above all at attracting the mobile production factor capital as a necessary basis for investments in one's own country. Conversely, due to corporate tax avoidance, tax competition between states can lead to a race to the bottom , i.e. lower and lower tax revenues. This phenomenon has been observed nationally and internationally for several decades.

The actual tax burdens of international corporations can hardly be reliably determined empirically . Simulation programs such as the European Tax Analyzer of the Center for European Economic Research are therefore used to model an effective tax rate in different countries .

The income tax burden of companies in the legal form of corporations in an international comparison can be found in the following table from the Federal Ministry of Finance for the EU and other countries (tax rates for central government plus, if applicable, regional authorities).

Corporate taxation 2015 in the EU and other countries
Source: Federal Ministry of Finance

country

Corporate taxes
in%
EU
Belgium 33.99%
Bulgaria 10%
Denmark 23.5%
Germany 29.83%
Estonia 20%
Finland 20%
France 38%
Greece 29%
Ireland 12.5%
Italy 31.4%
Croatia 20%
Latvia 15%
Lithuania 15%
Luxembourg 29.22%
Malta 35%
Netherlands 25%
Austria 25%
Poland 19%
Portugal 22.5%
Romania 16%
Sweden 22%
Slovakia 22%
Slovenia 17%
Spain 28%
Czech Republic 19%
Hungary 20.62%
United Kingdom 20%
Cyprus 12.5%
Other states
Norway 27%
Switzerland (Zurich) 20.65%
Japan 32.379%
Canada (Ontario) 26.5%
USA , New York State 39.62%
  1. ↑ . This value applies to a reference assessment rate of 400 percentage points for trade tax. The actual tax burden could vary depending on the municipality.


Alternative tax systems

The dual income tax model is particularly widespread in Scandinavian countries . This model also changes corporate taxation, as a distinction is made between earned income and capital income . This system was also proposed for Germany in April 2006 by the German Council of Experts to assess macroeconomic developments . In Estonia there is a system of corporate taxation that is unique in Europe, all corporations pay no income tax on their profits, only withdrawals are taxed and these are only taxed by the recipient of the withdrawal, this at the current rate of 21%.

Unitary taxation

In order to get the tax avoidance of multinational companies under control, the OECD and the EU are discussing total group taxation or unitary taxation as an alternative . The profits of the individual operating sites are no longer determined, but the profit of the entire group is taken as the basis. This total profit is then distributed to the countries using a formula and taxed there at the national tax rate.

See also

literature

  • Wolfram Scheffler : Taxation of Companies. CF Müller, Heidelberg 2007.
  • Alfred Boss: Reform of corporate and capital income taxation: On the right track? Institute for the World Economy, Kiel September 6, 2006 ( PDF file; 37 kB ).
  • Andreas Messerer: Corporate Tax Reform 2008. Richard Boorberg Verlag, Stuttgart 2007, ISBN 978-3-415-03956-8 .

Sources and individual references

  1. ↑ Definition of »corporate taxation« | Gabler Economic Lexicon . ( gabler.de [accessed December 26, 2016]).
  2. ↑ Dieter Birk , Marc Desens , Henning Tappe : Steuerrecht, 18th edition Heidelberg 2015, Rn. 1203 ff., 1220 ff., 1281 ff.
  3. ↑ OECD Model Tax Convention on Income and on Capital (PDF; 109 kB)
  4. ↑ Excerpt from the annual report 2004/05 ( Memento of the original dated December 30, 2006 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. , Advisory Board for the Assessment of Overall Economic Development , there item 775 @1@ 2Template: Webachiv / IABot / www.sachverstaendigenrat-wirtschaft.de
  5. ↑ Nicola Liebert: Globalization, tax avoidance and tax reduction race, Bonn 2004.
  6. ↑ Wilfried Herz: Half the tax rate, double the trouble. In: The time. , June 14, 2006
  7. ↑ European Commission: COM 2001/582: An internal market without tax obstacles .
  8. ↑ The most important taxes in an international comparison 2015, page 20
  9. ↑ Expertise dual income tax ( memento of the original dated June 19, 2006 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.sachverstaendigenrat-wirtschaft.de

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