German Corporate Tax Rate Explained: Where 15.825% and 30% Come From
How Germany's ~30% corporate tax is built: 15% CIT + 0.825% soli = 15.825%, plus trade tax (3.5% × Hebesatz). Worked €100k examples by city.
Search "German corporate tax rate" and you will find "15%", "30%", and "33%" all quoted as the answer. They are all correct, for different parts of the calculation. German corporate tax is built from two layers: a federal layer (corporate income tax plus the solidarity surcharge) and a local layer (trade tax, set by your city). This page derives the number from first principles, with worked €100,000 examples, so you can compute your own. It is orientation, not tax advice. Only a licensed German Steuerberater may advise or file; we teach the arithmetic and work with licensed partners. gmbh-germany.com is not itself a Steuerberater or law firm. Figures are indicative as of 10 June 2026.
Component 1, the federal layer (CIT + soli)
The trap here is that the headline "15%" is real but it is not the whole federal rate. Two pieces stack: corporate income tax, and a surcharge on that tax.
15% corporate income tax (§23 KStG)
Corporate income tax (Körperschaftsteuer, CIT) is a flat 15% of taxable profit (§23 KStG). It is the same for every corporation, large or small, with no progressive brackets. A GmbH earning €100,000 of taxable profit pays €15,000 of CIT before anything else is added.
The soli trap, 5.5% of the tax, not of profit (§4 SolzG)
The solidarity surcharge (Solidaritätszuschlag) is 5.5%, charged on the corporate tax, not on profit (§4 SolzG). This is the single most common error in DIY calculations. 5.5% of the 15% CIT is 0.825% of profit, so the federal rate is 15% + 0.825% = 15.825%. On €100,000 of profit the soli is €825, not €5,500.
| Step | Calculation | Amount |
|---|---|---|
| CIT (15%) | 15% × €100,000 | €15,000 |
| Soli (5.5% of CIT) | 5.5% × €15,000 | €825 |
| Total federal | €15,000 + €825 | €15,825 |
| Effective federal rate | €15,825 ÷ €100,000 | 15.825% |
Where 15.825% comes from (on €100,000 profit)
Component 2, the local layer (Gewerbesteuer)
Trade tax (Gewerbesteuer) is what turns 15.825% into roughly 30%, and it is why there is no single national corporate rate. It is built from two separate numbers: a fixed federal base rate and a multiplier set by your city.
The fixed 3.5% Steuermesszahl (§11 GewStG)
The first number is the Steuermesszahl, fixed at 3.5% nationwide (§11 GewStG). You multiply trade income by 3.5% to get the Messbetrag (base amount). This part is identical in every German municipality.
The municipal Hebesatz (§16 GewStG, min 200%, ~250–580%)
The second number is the Hebesatz, a multiplier each city sets itself (§16 GewStG). The statutory minimum is 200% (§16(4)); in practice cities run roughly 250% to 580%. Your effective trade-tax rate = 3.5% × Hebesatz.
| Hebesatz | Trade-tax rate (3.5% ×) |
|---|---|
| 200% (min) | 7.0% |
| 250% | 8.75% |
| 400% | 14.0% |
| 580% | 20.3% |
Take the same €100,000 of profit at a 400% Hebesatz:
| Step | Calculation | Amount |
|---|---|---|
| Messbetrag | 3.5% × €100,000 | €3,500 |
| Trade tax | €3,500 × 400% | €14,000 |
| Effective rate | €14,000 ÷ €100,000 | 14.0% |
Two notes. First, trade tax is not deductible against corporate income tax. Second, the trade-tax base differs slightly from the CIT base (for example, 25% of net financing costs above €200,000 are added back); we treat the bases as equal here for a clean rate example. For the detail, see what is Gewerbesteuer (trade tax).
Putting it together, the combined ~30–33%
Now stack both layers. The combined rate is 15.825% + (3.5% × Hebesatz). On €100,000 at a 400% Hebesatz:
| Component | Amount | Rate |
|---|---|---|
| CIT (15%) | €15,000 | 15.0% |
| Soli (5.5% of CIT) | €825 | 0.825% |
| Trade tax (3.5% × 400%) | €14,000 | 14.0% |
| Total tax | €29,825 | 29.825% ≈ 30% |
| Kept in company | €70,175 |
This is why high-authority sources land where they do: KPMG lists 30.06% for 2025, and PwC's city examples come out at roughly 30% in Berlin, 32% in Frankfurt, and 33% in Munich. The variation is entirely the Hebesatz.
Why your city matters
Identical profit is taxed differently depending on where your GmbH sits, because the Hebesatz changes. Compare the same €100,000 in two cities (using illustrative Hebesätze):
| Berlin (~400%) | Munich (~490%) | |
|---|---|---|
| CIT 15% | €15,000 | €15,000 |
| Soli (0.825%) | €825 | €825 |
| Trade tax (3.5% × Hebesatz) | 14.0% → €14,000 | 17.15% → €17,150 |
| Total tax | €29,825 (~30%) | €32,975 (~33%) |
| Kept in company | €70,175 | €67,025 |
Munich costs about €3,150 more than Berlin on the same €100,000. Across the country the combined burden ranges from roughly 24.6% (around a 250% Hebesatz) to about 36% (around 580%). Hebesätze are illustrative as of 10 June 2026 and are set annually, so confirm your own city's current rate before you rely on a number.
Two things that surprise foreigners
Beyond the city variation, two features catch newcomers out.
No €24,500 allowance for corporations
The €24,500 trade-tax allowance (Freibetrag, §11 GewStG) is reserved for natural persons and partnerships. A GmbH or AG gets none and is taxed from the first euro of trade income. So a sole trader and a GmbH on the same €100,000 do not share a trade-tax base: the sole trader deducts €24,500 first, the corporation does not.
The second layer on dividends (26.375%)
The ~30% above is the company-level tax only. When a GmbH distributes profit to an individual shareholder, 25% plus 5.5% soli = 26.375% Kapitalertragsteuer is withheld at source (broadly final). Profit can therefore be taxed twice: roughly 30% in the company, then 26.375% on what is paid out. One pointer for completeness: a corporate (holding) shareholder's dividends and share-sale gains are effectively 95% exempt under §8b KStG (≥10% holding for the CIT exemption, ≥15% for trade tax; the EU Parent-Subsidiary Directive can cut withholding to 0%). The full mechanics belong on the German holding company page; we will not re-run them here.
Is the rate changing? The legislated 15%→10% cut (2028–2032)
Yes, and it is already law. §23 KStG holds CIT at 15% through 2027, then cuts it by one percentage point per year to 10%. The solidarity surcharge continues (it remains 5.5% of whatever the CIT is), and trade tax is unaffected.
| Assessment period | CIT | + Soli | Federal rate |
|---|---|---|---|
| through 2027 | 15% | 0.825% | 15.825% |
| 2028 | 14% | 0.77% | 14.77% |
| 2029 | 13% | 0.715% | 13.715% |
| 2030 | 12% | 0.66% | 12.66% |
| 2031 | 11% | 0.605% | 11.605% |
| from 2032 | 10% | 0.55% | 10.55% |
A city with a 400% Hebesatz therefore glides from about 29.8% today toward roughly 24.5% by 2032. For now, anchor your planning to 15.825% federal and ~30–33% combined for FY2026; the cut is legislated but forward-looking.
Calculate it yourself
You can reproduce any of the figures above with three formulas:
- Federal rate = 15% + (5.5% × 15%) = 15.825%
- Trade tax = profit × 3.5% × your Hebesatz
- Combined rate = 15.825% + (3.5% × Hebesatz)
The only variable you need is your city's current Hebesatz, which municipalities set annually, so confirm it before you model. For execution, our explainer on German corporate taxes covers the practical side, or speak to an English-speaking tax advisor in Germany.
Combined corporate tax by city (on €100,000)
Frequently asked questions
Roughly, but it is built from layers: 15.825% federal plus trade tax (3.5% × Hebesatz, about 8.75–20.3%), giving typically ~30–33%, with a national range of about 24.6–36%.
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