List of tax offices
The first phase of the Tax Relief Law was introduced in January 1999 and aims to reduce the current bottom statutory tax rate from 22.9% (Jan 2000) to 19.9% in Jan 2002.
There are three commonly-used measures of corporate tax rates: statutory tax rates, average effective tax rates and marginal effective tax rates. Statutory rates apply to the taxable profit base after allowances and depreciation adjustments average effective tax rates measure the tax liability relative to statistically-recorded profits, and marginal effective tax rates measure the effects of the main corporate tax parameters on a firm's target rate of return on an additional unit of investment.
The top rate for non-entrepreneurial income (such as wages, dividends, income from self-employment) is currently 51% (Jan 2000) and is due to be cut to 48.5% in Jan. 2002. The top bracket of entrepreneurial income is currently taxed at 43%.
The statutory rate for retained profits is currently 40%, with distributed profits at 30%. Both are due to be cut to 25% in January 2001.
The current imputation system is also being reformed, whereby resident shareholders have advantages over non-resident shareholders by receiving domestic tax credits - they may offset corporation tax against their income tax. This currently hinders foreign capital investments and will be removed in 2002.
(Figures from OECD economic survey of Germany)
top of page anything missing, anything wrong?