Understanding German Trade Tax: Calculation Made Simple
Complete guide to Gewerbesteuer, clarifying rates, entities obligated to pay, and calculation methods for 2026.
The exact change
The key add-backs under Section 8 GewStG include 25% of interest on all debt, and rent add-backs of 20% for immovable property and 50% for movable property leasing. The actual Grundsteuer expensed on owned German real property is deducted, a mechanism that has applied since the Einheitswert reform.
The key add-backs under Section 8 GewStG include 25% of interest on all debt, and rent add-backs of 50% of rent for immovable property and 20% of rent for movable property. The actual Grundsteuer (property tax) expensed on owned German real property during the assessment period is deducted, reflecting that real property is already subject to Grundsteuer. This replaced the previous flat-rate mechanism (1.2% of the assessed Einheitswert) effective for tax years from 2025 onward.
Suggested change
Removed fabricated "our analysts" authority-voice language, corrected rent add-back percentages that had been swapped, replaced an outdated Einheitswert-based calculation with the actual 2025 Grundsteuer (property tax) change, and nuanced the 29.8% effective tax rate framing.
Why this is better
The immovable-property and movable-property rent add-back percentages had been swapped, and the article described the outdated Einheitswert-based flat-rate deduction as still current when it was replaced by the actual 2025 Grundsteuer figure.
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