Free invoice generator and tax tools for Germany

A small business in Germany meets four main taxes. Income tax (Einkommensteuer) on profit follows the progressive tariff in section 32a EStG: nothing up to 12,348 EUR of taxable income in 2026, then rising to 42% from 69,879 EUR and 45% from 277,826 EUR. A company pays corporation tax (Körperschaftsteuer) instead, at 15% until the 2027 assessment year. Both are assessed by the local Finanzamt.

Trade tax (Gewerbesteuer) is charged on the profit of a commercial business (Gewerbebetrieb). The Finanzamt sets a base amount of 3.5% of trade profit, after an allowance of 24,500 EUR for sole traders and partnerships, and the municipality then applies its own Hebesatz to it; where a municipality has not set a higher one, the rate is 280%. Value-added tax (Umsatzsteuer) is filed with the Finanzamt, and an employer also carries social-insurance contributions on each employee's wages.

The corporation tax rate is being cut in steps. Section 23 KStG lowers it by one point a year, to 14% for 2028, 13% for 2029, 12% for 2030, 11% for 2031 and 10% from 2032.

Germany has no presumptive or flat turnover tax, but two simplifications matter to a small business. A business that is not obliged to keep books (above 800,000 EUR turnover or 80,000 EUR profit in a year, section 141 AO, the Finanzamt must first notify the duty) may work out profit as receipts minus expenses under section 4(3) EStG, filed on Anlage EÜR. For VAT, section 20 UStG lets the Finanzamt, on application, allow tax to be accounted for when payment is received instead of when the invoice is issued, if the previous year's turnover was no more than 800,000 EUR, or for freelance professionals whatever their turnover.