Taxes

Tax benefits

Contrary to many preconceptions, Germany does not appear at the top of the list of countries with the highest tax rates but rather comes in mid-table.

The East Brandenburg region is also highly attractive due to its low rates for local business tax. Below is an overview of the most important taxation aspects that need to be taken into account when making an investment decision.

---

Tax contribution ratio (according to OECD as a %)

Germany comes mid-table when it comes to tax contribution ratio i.e. the percentage of taxes and social contribution to the total economic performance of a country (gross domestic product GDP). The tax contribution ratio for Germany includes highly-developed systems for social and old-age provisions which, in other countries such as the USA or Japan, are run privately.

Source: OECD-Revenue Statistics, Status as of: 2010

---

Corporate tax (nominal, in %)

Nominal taxation of the profit of capital companies is approx. 30%. This does not include generous rules for losses carried forward and a wide range of opportunities to minimise taxable profit.

Source: German Federal Ministry of Finance, status as of: 2009

---

Local business tax assessment rates (in %)

The rate for business tax in Frankfurt (Oder)/Eisenhüttenstadt is significantly lower than in other business locations in Germany.

Source: Statistical federal Office, status as of: 2010

---

VAT (in %)

Germany’s VAT rate is among the lowest in the European Union. Only Spain, Luxembourg, Malta and Cyprus currently have lower rates of VAT. Information cited refers to the standard rate. A reduced VAT rate of 7% applies for certain goods (e.g. food or printed products).

Source: EU commission, status as of: 2011 

---