General – founding & basics · 1.1

Which taxes does my UG or GmbH pay?

Short answer

Your UG or GmbH pays Körperschaftsteuer (corporate income tax) with Solidaritätszuschlag (solidarity surcharge) and Gewerbesteuer (trade tax) on its profit. In addition, it remits the Umsatzsteuer (value added tax, VAT) that it charges to its customers. You only pay taxes personally once money flows from the company to you, meaning as salary or profit distribution.

Key points

For a corporation, there are two levels: the company and you personally.

Körperschaftsteuer (corporate income tax): the company's profit tax, plus solidarity surcharge.
Gewerbesteuer (trade tax): applies to every UG and GmbH, regardless of how it earns its money. How high it is is determined by your municipality via the Hebesatz (local tax multiplier).
Umsatzsteuer (VAT): You add it to your prices, deduct the VAT from your purchases (Vorsteuer / input tax), and remit the remainder to the tax office. It is a transitory item, not revenue.
Salary: If the GmbH pays you a managing director's salary, it counts as a business expense for the company. You pay Lohnsteuer (wage tax) on it.
Distribution: If the GmbH distributes profit to you, it withholds Kapitalertragsteuer (capital gains tax) and remits it.

Profit that remains within the company is only taxed at the GmbH level. That is why many founders reinvest during the first years.

Figures & thresholds (as of November 2026)

Corporate income tax: 15% + 5.5% solidarity surcharge on it = 15.825%. From 2028, the rate decreases annually by one percentage point to 10% from 2032.
Trade tax: base rate 3.5% × municipality's multiplier (at least 200%). No tax-free allowance for UG and GmbH.
Total tax burden at a multiplier of 400%: around 30% of profit.
Distributions: generally 25% Abgeltungsteuer (flat-rate withholding tax) + solidarity surcharge.

Legal basis

§ 23 KStG§ 2 GewStG§ 16 GewStG§ 1 UStG§ 15 UStG§ 19 EStG§ 43 EStG

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