GRP Rainer LLP

Complex Questions Concerning Corporation Tax


Cologne, Germany -- (SBWIRE) -- 06/07/2013 -- GRP Rainer Lawyers Tax Advisors, Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart, Hanover, Bremen, Nuremberg, Essen and explains: Corporation tax is paid by corporations, legal persons and estates. It is a particular form of income tax. In particular, limited companies, cooperatives, other entities governed by private law, as well as unincorporated associations, institutions, foundations etc. are liable for taxation. The taxable income is calculated on the basis of the tax balance sheet and numerous corrections arising respectively from the tax laws.

Corporation tax is a community tax, which means that the amounts paid are collectively due to the federal government and the states. The legal basis for corporation tax is the Corporation Tax Act (KStG). The extent of the corporation tax to be paid is calculated among other things according to the taxable income of the corporation concerned. Corporation tax thus ultimately amounts to a tax on income, that is to say the basis for the calculation of taxation is the income or profit which the corporation has generated in the tax assessment period (in this context, this is a calendar year).

For the payment of corporation tax, advance payments must be made to the tax office. At the same time, the extent of corporation tax depends on the most recent profits. At the end of the business year, the advance payment of corporation tax is offset against the actual tax liability for the current business year.

Additionally, one must distinguish between unlimited and limited liability for corporation tax. Unlimited tax liability applies to corporations that have their registered office or central administration in Germany and affects all income. In the case of limited liability for corporation tax, domestic income (if neither registration office nor central administration is in Germany) is sufficient. Under certain circumstances, it is also possible to be exempt from the obligation to pay tax.

Corporation tax law is a complex matter and for a layman often not to be overlooked. A lawyer active in the field of tax law can provide representation where there are disputes with the financial authorities or before the finance courts.

About GRP Rainer LLP
GRP Rainer LLP is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Essen, Frankfurt, Hamburg, Hannover, Munich, Stuttgart, Bremen, Nuremberg and London UK.

Contact Michael Rainer
Lawyer, Managing Partner
GRP Rainer LLP
Hohenzollernring 21-23
50672 Cologne
Phone: +49 221-27 22 75-0