Germany Corporate Tax Guide (Körperschaftsteuer 2026)
A comprehensive guide to German corporate taxation — Körperschaftsteuer at a flat 15%, solidarity surcharge (Soli) of 5.5% on KSt, and Gewerbesteuer (trade tax) at 3.5% × municipal Hebesatz (200%–490%), producing an effective combined rate of approximately 30% depending on location.
Corporations in Germany (Kapitalgesellschaften such as GmbH, UG, AG) are subject to Körperschaftsteuer (corporate income tax) on their worldwide profits. The tax burden consists of three layers: KSt, Soli, and Gewerbesteuer. The total effective rate is among the highest in Europe, averaging around 30%, but varies by municipality. For related reading, see our Company Forms Guide → and Holding Companies Guide →.
The Three Layers of German Corporate Tax
- Körperschaftsteuer (KSt): 15% flat rate on taxable profit (zu versteuerndes Einkommen). This applies to all corporations (GmbH, UG, AG, Genossenschaft). The rate has been stable at 15% since 2008.
- Solidaritätszuschlag (Soli): 5.5% of the KSt amount = 0.825% additional tax on the profit (15% × 5.5%). Most corporations still pay the full Soli; the partial relief introduced in 2021 mainly benefits individuals.
- Gewerbesteuer (trade tax): 3.5% (Steuermesszahl) × the municipal Hebesatz (multiplier). The Hebesatz varies by city — Berlin uses 410%, Munich 490%, Frankfurt 460%, Hamburg 470%. The Gewerbesteuer is deductible as a business expense for KSt purposes (creating a small circular effect).
Effective Rates by Municipality (2026)
- Berlin: Hebesatz 410% → effective Gewerbesteuer 14.35% + KSt 15% + Soli 0.825% = approximately 30.2% total effective rate (after deducting Gewerbesteuer from the KSt base).
- Munich: Hebesatz 490% → effective rate ~33.1%, the highest among major German cities.
- Frankfurt / Main: Hebesatz 460% → effective rate ~31.5%.
- Smaller municipalities (e.g., Norderfriedrichskoog): Hebesatz as low as 200% → effective rate ~22.8%, illustrating why tax location planning is important.
- Dividend exemption (Schachtelprivileg): 95% of dividends received from domestic or foreign subsidiaries are tax-free at the corporate level if the parent holds at least 10% of the shares. This keeps the effective tax rate on intercompany dividends very low.