Business taxes in Germany: calculator for sole proprietors and companies
Choose a sector, a legal form and a tax system, enter your annual revenue and expenses — the calculator shows every tax and contribution, the total and what you keep.
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Legal forms
Sole trader (Einzelunternehmen) Einzelunternehmen (Freiberufler oder Gewerbetreibender)
You work in your own name as an individual: there is no separate legal entity and you are liable for business debts with all your assets. The activity decides whether you are a liberal profession (Freiberufler) or a trade (Gewerbe) — and with it trade tax, trade registration and chamber membership.
Requirements
Trade (Gewerbe): register it with the municipality (Gewerbeanmeldung) when you start — in Berlin EUR 26, online EUR 15. Liberal professions and teaching (Unterrichtswesen) do not need this registration (§§ 6, 14 GewO).
Tax registration: after starting, file the “Fragebogen zur steuerlichen Erfassung” with the tax office via ELSTER; a liberal profession notifies the tax office directly (§ 138 AO).
Chambers: a trade makes you a member of the Chamber of Industry and Commerce (IHK); without a commercial-register entry no fee is charged while trade profit is at most EUR 5,200 a year (§ 3 IHKG). Crafts belong to the Chamber of Crafts (HWK); liberal professions to neither.
Bookkeeping: income-expense statement (Anlage EÜR) with the income tax return, due by 31 July of the following year (§ 149 AO). A trade must keep double-entry books once turnover exceeds EUR 800,000 or profit EUR 80,000 a year (§ 141 AO); a liberal profession never.
Commercial register: a trade that needs a commercially organised business is a merchant (Kaufmann, § 1 HGB) and must register; merchant's books are not required while turnover is at most EUR 800,000 and profit EUR 80,000 (§ 241a HGB).
Sole proprietorEinzelunternehmen — freiberufliche Tätigkeit (§ 18 EStG)
You work as a self-employed 'Freiberufler': profit is taxed at the progressive income tax scale (§ 32a EStG) plus the solidarity surcharge; no trade tax. Health and long-term care insurance are voluntary statutory cover with a minimum base.
Conditions
IT consulting counts as a liberal profession only if the tax office accepts it as similar to an engineer's profession (§ 18(1) no. 1 EStG, 'similar professions') — usually an engineering/IT degree or equivalent knowledge is needed. Otherwise it is a trade (Gewerbe) — see the next form.
VAT: small-business exemption if last year's turnover was ≤ EUR 25,000 and this year's is ≤ EUR 100,000 (§ 19 UStG); otherwise you charge VAT (19%).
Pension insurance is not compulsory, but becomes compulsory (18.6% of profit) if you have no employees and work permanently for essentially one client (§ 2 no. 9 SGB VI) — not included in the calculation.
By sector: possible for IT and consulting, engineers, translators, journalists, teaching and tutoring, artistic work (§ 18 EStG). Trading in goods and making goods for sale are always a trade: in these sectors the form is not available.
Sole proprietorEinzelunternehmen — Gewerbebetrieb (§ 15 EStG)
Same as the liberal profession, plus trade tax: 3.5% of profit above EUR 24,500 × the municipal multiplier (Berlin 410%). Most of it is credited against income tax (4.0 × the base amount, § 35 EStG).
Conditions
You must register the trade (Gewerbeanmeldung) with the local authority; the municipal multiplier varies — the calculation uses Berlin (410%).
VAT: small-business exemption if last year's turnover was ≤ EUR 25,000 and this year's is ≤ EUR 100,000 (§ 19 UStG); otherwise 19% VAT.
Limited company (GmbH / UG) Gesellschaft mit beschränkter Haftung (GmbH) / Unternehmergesellschaft (haftungsbeschränkt)
The company is a separate legal entity: liability is limited to its assets. One person can be the sole shareholder and managing director (Geschäftsführer). For tax purposes a GmbH is always a trade, whatever it does.
Requirements
Articles of association are notarised (§ 2 GmbHG) and the company is entered in the commercial register (Handelsregister); then the trade is registered with the municipality (Berlin EUR 31).
GmbH share capital at least EUR 25,000, of which at least EUR 12,500 paid in before registration (§§ 5, 7 GmbHG). A UG (haftungsbeschränkt) can be founded with EUR 1, but 1/4 of each year's profit goes into a compulsory reserve (§ 5a GmbHG).
Double-entry bookkeeping and annual financial statements, published in the company register (Unternehmensregister, § 325 HGB). Corporate tax, trade tax and VAT returns every year.
A GmbH is always a trade (§ 2 Abs. 2 GewStG): trade tax without the EUR 24,500 allowance and IHK membership in every sector.
CompanyGesellschaft mit beschränkter Haftung (GmbH)
The company pays 15% corporate tax + solidarity surcharge and trade tax (14.35% of profit in Berlin) — about 30.2% in total. Dividends to the owner: 25% + solidarity surcharge (≈ 26.4%) on the amount above EUR 1,000 a year or, on application, 60% of the dividends at the progressive scale — the calculation uses the cheaper one.
Conditions
A GmbH needs share capital of at least EUR 25,000 (§ 5 GmbHG), notarial formation and entry in the commercial register. A UG (haftungsbeschränkt) can be formed with EUR 1 (§ 5a GmbHG) and is taxed the same way, but 1/4 of each year's profit must go to a statutory reserve.
An owner without salary still needs health insurance: the calculation uses voluntary statutory cover on the dividends (or on the minimum base if nothing is paid out). These contributions reduce the tax only when the dividends are taxed at the scale.
Dividend tax is the lowest of three lawful options: 25% (Abgeltungsteuer); the whole amount above EUR 1,000 at the scale (§ 32d(6) EStG); 60% of the dividends at the scale, without the EUR 1,000 (partial-income method, § 32d(2) no. 3 EStG — for a stake of at least 25%, or at least 1% with work for the company that gives significant influence on its business). The last one is cheaper up to about EUR 1.85 million of company profit, the 25% rate above that. The application is filed with the tax return at the latest and applies for that year and the next four unless revoked; after revocation no new application is possible for this shareholding. The company still withholds 25% on payout; the difference is refunded on assessment.
Software development, IT services, consulting for companies and entrepreneurs.
Liberal profession (no trade tax) only if the tax office treats the work as similar to an engineer's (§ 18 EStG) — usually with IT or engineering training or equivalent knowledge. Otherwise it is a trade. Both options are shown.
Trade tax in Berlin: 3.5% × 410% = 14.35% of profit above EUR 24,500; most of it is credited against income tax (4.0 × base amount, § 35 EStG), so the extra cost is small.
VAT 19%; small-business exemption if turnover was ≤ EUR 25,000 last year and ≤ EUR 100,000 this year (§ 19 UStG).
Other business services draft — data being checked
Marketing, design, translation, engineering, bookkeeping and other professional services to companies.
Liberal profession is possible for the professions listed in § 18 EStG: engineers, translators and interpreters, journalists, consulting economists, tax advisers; design if the tax office accepts it as artistic work. Marketing and advertising are usually a trade.
Trade: registration with the municipality, IHK membership, trade tax on profit above EUR 24,500 (Berlin 410%), mostly credited against income tax (§ 35 EStG).
VAT 19%; small-business exemption if turnover was ≤ EUR 25,000 last year and ≤ EUR 100,000 this year (§ 19 UStG).
Services to individuals draft — data being checked
Household services, repairs, beauty, tutoring, photography — for private customers.
Most services to private customers — beauty, repairs, cleaning, photography — are a trade: registration, IHK or HWK, trade tax above EUR 24,500 profit. Teaching and tutoring are a liberal profession (§ 18 EStG) and need no trade registration (§ 6 GewO).
Hairdressers, electricians, car mechanics, bicycle mechanics, painters and other crafts in Annex A HwO are licensed crafts: you need an entry in the craft register (Handwerksrolle), usually with a master craftsman qualification, and HWK membership.
Pension insurance is compulsory for self-employed teachers and tutors without employees and for craftsmen in the craft register (§ 2 SGB VI) — 18.6% of income; not included in the calculation.
Cash through an electronic till: the till must have a certified security device (TSE) and you must give the customer a receipt for every sale (§ 146a AO).
VAT 19%; small-business exemption if turnover was ≤ EUR 25,000 last year and ≤ EUR 100,000 this year (§ 19 UStG).
Trade in goods draft — data being checked
Retail and wholesale, including an online shop (excluding excise goods).
Trading in goods is always a trade: the liberal-profession form is not available. Trade registration, IHK, trade tax on profit above EUR 24,500 (Berlin 410%), mostly credited against income tax (§ 35 EStG).
Bookkeeping: with turnover above EUR 800,000 or profit above EUR 80,000 — double-entry books and stocktaking (§ 141 AO); a shop that needs commercial organisation is entered in the commercial register (§ 1 HGB).
Cash through an electronic till: the till must have a certified security device (TSE) and you must give the customer a receipt for every sale (§ 146a AO).
VAT 19%, most foods 7% (§ 12 Abs. 2 UStG, Annex 2); small-business exemption as for other sectors. Online sales to consumers in other EU countries above EUR 10,000 a year in total — VAT of the buyer's country, declared via the OSS (§ 3c UStG).
Manufacturing draft — data being checked
Making and selling your own products: food, furniture, clothing, handmade goods.
Making and selling goods is a trade: the liberal-profession form is not available; trade tax and IHK or HWK membership apply.
Bakers, confectioners, butchers, joiners (Tischler) and other crafts in Annex A HwO are licensed: entry in the craft register, usually with a master craftsman qualification. These craftsmen must pay 18.6% pension contributions (§ 2 Nr. 8 SGB VI) — not included in the calculation.
VAT: most foods 7% (Annex 2 UStG), other goods 19%; small-business exemption with turnover ≤ EUR 25,000 last year and ≤ EUR 100,000 this year (§ 19 UStG).
Assumptions
One owner resident in Germany, no employees, no other income, single, no children, full year; no church tax.
Health insurance: voluntary statutory cover at the reduced rate of 14.0% (no sick pay) + average additional rate 2.9%; long-term care 3.6% + 0.6% for childless people. Base: profit (dividends for the GmbH) between EUR 15,820 and EUR 69,750 a year. Private insurance is an alternative and is not calculated.
Income tax: profit less health and long-term care contributions and the EUR 36 lump-sum special expenses; trade tax at Berlin's 410% multiplier; VAT is not included.
GmbH: the owner takes no salary; profit after tax is either paid out in full as dividends or kept in the company.
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