The term “Gewerbesteuer” translates to “trade tax” in English and refers to a tax levied on the income of businesses in Germany.
What is “Gewerbesteuer”?
The Gewerbesteuer is a municipal tax in Germany applied to the profits of commercial enterprises. It is calculated by applying a local multiplier, known as the “Hebesatz,” to a base amount determined by the federal tax authorities. This tax is relevant for businesses operating in Germany, as it directly affects their financial planning and can influence decisions regarding the location of business operations due to varying Hebesatz rates across municipalities[1][2].
More information about “Gewerbesteuer”
The Gewerbesteuer is an important source of revenue for German municipalities and is considered when businesses make location decisions. The Hebesatz, which municipalities set independently, can range from a minimum of 200% to over 400% in urban areas, and even higher in some cases. The tax is calculated by subtracting a standard allowance from the company’s profits, multiplying by a tax measure number (Steuermesszahl), and then by the local Hebesatz[1][2][4].
Related to “Gewerbesteuer”
Here are some additional terms that are related to Gewerbesteuer:
- Hebesatz: A local multiplier set by each municipality to calculate the Gewerbesteuer[1][2].
- Steuermessbetrag: The tax measure amount, which is a base figure used in the calculation of Gewerbesteuer[1][2].
- Freibetrag: A tax-free allowance that reduces the taxable amount for certain types of businesses[3][6].
- Gewerbeertrag: The operating profit of a business, which is the basis for assessing Gewerbesteuer[4].
The Gewerbesteuer is a key consideration for businesses in Germany, impacting their financial planning and potentially influencing where they choose to locate their operations.