German Tax Law
Germany has a multifaceted tax system that includes varying rates of income tax and corporate taxes that are assessed at both the national and municipal level.
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Personal Income
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Personal income taxes are assessed on a progressive sliding scale, so the more an individual makes, the more she must pay in taxes. Individuals pay on income above 250,731 euros. As of tax year 2010, the tax rates on personal income ranged from 14 percent for the lowest income bracket to 45 percent for the highest bracket.
Corporate Income
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The standard national corporate income tax was set at 15 percent as of 2010. Corporations also pay a business "trade tax" levied by the municipalities that varies, usually from 14 to 17 percent, depending on the region. A "solidarity tax" imposed to facilitate the continuing economic merger of East and West Germany is also assessed at 5.5 percent. The total corporate tax rate including these two additional taxes typically ranges from 30 to 33 percent.
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Sales Tax
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A German sales tax on goods and services is charged at 19 percent.
Capital Gains
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Individuals are charged capital gains taxes on the sale of private real estate and other assets. The rate is 25 percent, where the personal investment is less than 1 percent of the total value, and 60 percent where the investment is more. For companies, capital gains are included in the corporate income calculations.
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References
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