Germany Corporate Tax Rate: 2026 Breakdown Explained

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1. 14 July 2026 · corrected by Emir Baycan

   Removed unverified "our analysts" authority-voice language and corrected the R&D tax credit cap, the CFC (controlled foreign corporation) threshold, the Austria tax phase-down figure, and nuanced the framing around the 29.8% effective tax rate figure. The dividend withholding tax table was also corrected later, raising the rate from 10% to 15% following a December 2024 Presidential Decree.

   Before

   The Wachstumschancengesetz (Growth Opportunities Act) raised the maximum assessment base from 4 million EUR to 6 million EUR per year (yielding a maximum credit of 1.5 million EUR). Austria's corporate tax rate phased down from 25% (2022) to 24% (2023) to 22.5% (2024 onward).

   After

   The Wachstumschancengesetz (Growth Opportunities Act), effective March 2024, raised the maximum assessment base from 4 million EUR to 10 million EUR per year (yielding a maximum credit of 2.5 million EUR, with higher effective rates available for qualifying SMEs), and a further increase to a 12 million EUR assessment base applies to projects starting from 1 January 2026. Austria's corporate tax rate phased down from 25% (2022) to 24% (2023) to 23% (2024 onward).

   Why: The R&D tax credit cap increase was understated (should be a 10 million to 12 million EUR base, not 6 million) and Austria's final phased-down corporate tax rate was misstated as 22.5% instead of the correct 23%.

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