UG & GmbH day to day · 4.2
What is corporate income tax (Körperschaftsteuer)?
Short answer
Körperschaftsteuer (corporate income tax) is essentially the income tax of your company. It amounts to 15% on profits, plus the solidarity surcharge. Unlike for private individuals, there is no basic tax-free allowance and no progressive tax rate.
Key points
- The basis is the profit from the balance sheet, adjusted for tax rules.
- Some expenses do not reduce profit: for example, the Körperschaftsteuer and Gewerbesteuer (trade tax) themselves, 30% of entertainment expenses, or gifts exceeding the exemption limit.
- Hidden profit distributions (verdeckte Gewinnausschüttungen) are added back to the profit.
- Profits from participations in other corporations are largely tax-free.
- Tax is paid via advance payments and settled with the annual tax return.
Figures & thresholds (as of November 2026)
- 15% + 5.5% solidarity surcharge = 15.825%
- Reduction from 2028: 14%, 2029: 13%, 2030: 12%, 2031: 11%, from 2032: 10%
Legal basis
§ 1 KStG§ 8 KStG§ 8b KStG§ 10 KStG§ 23 KStG
Continue
- Next video: How is trade tax calculated?
- Related: What Are the Benefits of a Holding Structure?
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