2015 handbook: doing business in germany
TRANSCRIPT
2015 Handbook: Doing business in Germany
Legal forms of business
Social security & Labor law aspects
Overview of taxation system
General information about Germany
Capital: Berlin
Area: 357,121 sqkm
Population: 80.6 million
Official language: German
Official currency: Euro
GDP growth: 0,3% (2015,1st half)
Investment incentives
Excellent geographical position and infrastructure
Stable economic growth
Strong consumer market
Corporate tax of 15% + surcharge
Highly educated and skilled workforce (especially
Engineers and IT-Specialists)
Safe investment environment
Doing business in Germany
Contact us and find out how we can help you!
Peter Pašek
Managing Director
Tel.: +421 905 998 828
Mail: [email protected]
Legal forms of business
The most frequent form of business is Limited Liability Company (GmbH), mostly because of these reasons:
Public trustworthiness Smooth establishment and registration Limited liability of shareholders
The m
General rules for purchasing of real estate
No general restrictions for purchasing of real estate Real estate tax of 3.5% up to 6.5% of purchase price (depending on federal states) Notarization of transaction required
The form of business The minimum capital
(in EUR) English German
Self-employments Einzelunternehmen 0
Unlimited Partnership Gesellschaft bürgerlichen Rechts / GbR 0
Ordinary Partnership Offene Handelsgesellschaft / OHG 0
Private Limited Partnership Kommanditgesellschaft / KG 0
Limited Liability Company
Gesellschaft mit beschränkter Haftung / GmbH
Special: Unternehmergesellschaft
(haftungsbeschränkt) / UG
25,000 (GmbH)
1 (UG)
Joint-Stock Company Aktiengesellschaft / AG 50,000
Legal forms of business
General social and health security
Contribution Employee Employer
Social security
(pension insurance) 9.35 % 9.35%
Social security
(health insurance)
7.30 %
+ add. fee (depends
on insurance)
7.30 %
Social security
(care insurance)
1.175 %
Saxony: 1.675
1.175 %
Saxony: 0.675
Social security
(unemployment
insurance)
1.5 % 1.5 %
TOTAL 20.175 % 19.275 %
The maximum assessment bases are EUR 72.600 / 62.400 (pension insurance and
unemployment insurance: West Germany / East Germany) EUR 49.500 (health
insurance and care insurance) salary p.a.
Furthermore there are several additional contributions like insolvency allocation
(0.15 %), maternity allocation (ca. 0.40%), sickness allocation (ca. 1.5 %) and the
Employer's Liability Insurance Association which are paid by the employer.
General comments on labour law
Main features of employment relationship Applicable law
Contract type Can be concluded to definite
and indefinite term.
German Civil Code
Several specialized laws
such as:
protection
against dismissal
working time act
minimum wage
act
continued
remuneration
Essential parts of
the contract
Written form, parties, type of
contract, start date, date of
contract conclusion, nature of
work, place of work,
remuneration corresponding to
the type of work, working time
Minimum wage
8.50 EUR / hour
(few exceptions apply, special
branches might have higher
wages as per individual
collective agreements)
Working time 40 hours per week
(can be individually agreed)
Holiday
entitlement per
year
24 days per year (minimum)
based on a 6-day week.
20 days per year based on a 5-
day week
Social security & Labor
law aspects
Corporate income tax & Solidarity tax
Applicable law: Corporate Tax Law
Corporate income tax rate: 15 % + 5.5 % solidarity surcharge = 15.825 %
Advance payments: Quarterly (03/06/09/12), based on the amount of the last
known tax liability or request to adjustment.
Construction withholding tax (see other taxes below).
Filing the corporate income tax return: Taxable period can be a calendar year, or
a fiscal year (12 consecutive calendar months).
Generally, the time period for the submission of the CIT return is 5 months after the
end of the taxable period (i.e. regularly 31st May). If the CIT return is filed by a tax
advisor, the time limit for the submission of the CIT return is 12 months after the end
of the taxable period (i.e. 31st December).
Losses: Losses can either be carried backward (one year) or forward and be
charged against profits of past or future years.
Trade tax
Applicable law: Trade Tax Act
Tax rate: 3,5% base rate x municipal multiplier = trade tax rate (total between 7% -
20%).
Tax-exempt amount: EUR 24,500 only for partnership companies
(Personengesellschaften) and self-employments (Einzelunternehmen).
Taxable period: The taxable period can be a calendar year, or a fiscal year (12
consecutive calendar months). Generally, the time period for the submission of the
Trade Tax return is 5 months after the end of the taxable period. If the Trade Tax
return is filed by a tax advisor, the time limit for the submission of the CIT return is 12
months after the end of the taxable period.
Losses: Losses can be carried forward in the future (unlimited).
Personal income tax
Applicable law: Income Tax Law
Rate: Progressive tax rate starting at 14% up to 45%
Deductions: Income-related expenses and provisions are deductible.
Tax-exempt amount: EUR 8.472 (single); EUR 16.944 (married couple)
Advance payment: monthly income tax deduction from gross salary by the
employer (payroll tax); additionally tax prepayment if set by fiscal authorities for other
than employment income.
25% withholding tax + solidarity surcharge on capital gains deducted automatically
by bank.
Construction withholding tax (see other taxes below).
Filing the personal income tax return: Generally, the time limit for the submission
of the PIT return is 5 months after the end of the taxable period. The PIT taxable
period is calendar year. If the PIT return is filed by a tax advisor, the time limit for the
submission of the PIT return is 12 months after the end of the taxable period.
Value added tax
Applicable law: Value Added Tax Act
Rate: 19% (basic rate); 7% (reduced rate)
German VAT for international trade or services: If VAT liable revenues are
generated in Germany / EU reverse charge might apply. There is a mandatory VAT
registration if the delivery of goods is transnational.
Intracommunity sales are tax exempt, while intracommunity purchases are taxable, a
separate declaration (Zusammenfassende Meldung “ZM”) is required.
Taxation system
Threshold for declaration: Voluntary if turnover was above EUR 17,500 in the
previous year and is presumably under EUR 50,000 in the present year.
Inheritance and gift tax
New tax-exempt amount every 10 years.
Real estate transfer tax
3.5 – 6.5% of purchase price depending on the state.
Real estate tax Imposed on plot of lands and buildings
Tax rate depends on the value and location of the property
Road tax
Imposed on every motor vehicle.
Excise duties
Imposed on specific products (e.g. fuel, alcohol, tobacco).
Construction withholding tax
Part of CIT/PIT; “Bauabzugsteuer”
For construction works performed in Germany, 15% withholding tax of invoice sum
(+ VAT) need to be withheld by customer and paid to Tax Office on behalf of supplier
(only B2B).
The construction withholding tax is part of the supplier’s tax (CIT/PIT) prepayment.
Foreign companies not CIT/PIT liable in Germany can reclaim the withholdings
deducted after year-end.
Exemptions from withholding:
Withholding only required if invoice amount is in excess 5 000 EUR p.a. /
supplier
If fiscal authority has provided supplier with a valid tax exempt certificate
Please note: The construction withholding tax does also apply to foreign suppliers
if construction site is in Germany. Foreign companies need to request / register
from fiscal authority in order to receive a tax exempt certificate.
Reverse charge rules: VAT will be paid by customer in following cases:
EU reverse charge for services received from or provided to EU supplier / customer (B2B), verification using USt-ID No. is required
Intracommunity purchases (B2B)
Revenue for construction works between construction companies (B2B)
Revenue for cleaning works between cleaning companies (B2B)
Delivery of certain goods (scrap metals, scrap glas, gold, telecom equipment > 5 k EUR etc. / all B2B)
Depending on the degree of relationship with the deceased or donor:
Tax-exempt amounts between EUR 20,000 and EUR 500,000
Tax rate between 7 and 50%
I II III IV IV VI VII VIII IX X XI XII
VA
T
Submission of VAT return and payment of VAT for the previous
calendar month for tax payers with a monthly tax obligation
(extended by one month if a permanent extension of time has been
granted)
Mo
12.1.
Tu.
10.2.
Tu.
10.3.
Fr.
10.4.
Mo.
11.5.
We.
10.6.
Fr.
10.7.
Mo.
10.8.
Th.
10.9.
Mo.
12.10.
Tu.
10.11.
Th.
10.12.
Submission of VAT return and payment of VAT for the previous tax
period for tax payers with a quarterly tax obligation
(extended by one month if a permanent extension of time has been
granted)
Mo.
12.1.
Fr.
10.4.
Fr.
10.7.
Mo.
12.10.
Submission of EC sales list for entities which have the obligation to
submit the EC sales list for the calendar month (“ZM”)
Mo.
26.1.
We.
25.2.
We.
25.3.
Mo.
27.4.
Tu.
26.5.
Th.
25.6.
Mo.
27.7.
Tu.
25.8.
Fr.
25.9.
Mo.
26.10.
We.
25.11.
Mo.
28.12.
Submission of EC sales list for entities which have the obligation to
submit the EC sales list for the calendar quarter (“ZM”)
Mo.
26.1.
Mo.
27.4.
Mo.
27.7.
Mo.
26.10.
Submission of Intrastat declaration for entities with have the
obligation to submit the Intrastat declaration (electronic form)
Fr.
16.1.
Fr.
13.2.
Fr.
13.3.
Th.
16.4.
Mo.
18.5.
Mo.
15.6.
Tu.
14.7.
Fr.
14.8.
Mo.
14.9.
Fr.
13.10.
Mo.
14.11.
Mo.
14.12.
Inco
me
tax
Submission of tax return on corporate, trade and personal income tax
and payment of tax resulting from the tax return for 2014
(if taxable period is calendar year)
So.
31.5.
Submission of tax return on corporate, trade and personal income tax
if filed by tax advisor or if the company has statutory audit and
payment of tax resulting from the tax return for 2014 (if taxable period
is calendar year)
Th.
31.12.
Payment of monthly advances for income tax from dependent activity
(employment)
Mo.
12.1.
Tu.
10.2.
Tu.
10.3.
Fr.
10.4.
Mo.
11.5.
We.
10.6.
Fr.
10.7.
Mo.
10.8.
Th.
10.9.
Mo.
12.10.
Tu.
10.11.
Th.
10.12.
Tax calendar
Payment of quarterly advances for corporate, trade and personal
income tax
Tu.
10.3.
We.
10.6.
Th.
10.9.
Th.
10.12.
Payment of advances for trade tax (q-quarterly/ s-semi-annually)
Mo.
16.2.
(q)
Fr.
15.5.
(q/s)
Mo.
17.8.
(q)
Mp.
16.11.
(q/s)
Payment of annual advances for trade tax
Mo.
17.8.
(q)
Re
al e
stat
e t
ax
Payment of quarterly advances for real estate tax
Mo.
16.2
Fr.
15.5.
Mo.
17.8.
Mo.
16.11.
Soci
al S
ecu
rity
Payment of monthly social security We.
28.1
We.
25.2.
Fr.
27.3.
Di.
28.4.
We.
27.5.
Fr.
26.6.
We.
29.7.
Fr.
27.8.
Mo.
28.9.
We.
28.10.
Th.
26.11.
Mo.
28.12
Disclaimer
Please note that our materials have been prepared for general guidance on the matter and it does not represent a customized professional advice. Furthermore, because the legislation is changing continuously, some of the information may have been modified after the material has been released and Accace does not take any responsibility and is not liable for any potential risks or damages caused by taking actions based on the information provided herein.
About Accace
With more than 250 professionals and branches in 7 countries, Accace counts as
one of the leading outsourcing and consultancy services providers in Central and
Eastern Europe. During past years, while having more than 1400 international
companies as customers, Accace set in motion its strategic expansion outside CEE
to become a provider with truly global reach.
Accace offices are located in Czech Republic, Hungary, Romania, Slovakia, Poland,
Ukraine and Germany. Locations in other European countries and globally are
covered via Accace’s trusted partners network.
Accace Outsourcing GmbH
Föhrenweg 1
85591 Vaterstetten
Germany
Phone: +421 905 998 828
Mail.: [email protected]
www.accace.com
Subscribe to our News Flash!