Comprehensive information on the economic and tax conditions is an essential prerequisite when founding a business. Don't worry, there are only four to five types of tax that you need to have rough working knowledge of - even if you are supported by a tax advisor from the start. Without basic knowledge of taxation it will be difficult for you to calculate your services and organise your business processes.
The Tax Guide for a successful start-up gives an initial overview of the business registration process, the choice of business form and the associated taxation, as well as questions relating to the determination of profits.
In principle, local authorities are entitled to collect trade tax. They also set the trade tax rate. In Berlin, trade tax is collected by the tax office. The basis for taxation is a company’s trade income, i.e. a company’s profit adjusted according to special specifications.
This tax is due quarterly by means of a trade tax prepayment. It is therefore useful for founders to build up appropriate reserves as profits rise. Find out more.
Income tax is collected from the incomes of natural persons, i.e. from sole traders or from directors or partnerships. The basis for the assessment is the income earned within a calendar year. Types of income include, for example, income from a business. Find out more.
As an entrepreneur, you are obliged to invoice your customers for value-added tax and to pay it to the tax office as part of the regular advance return for value-added tax. Certain professional groups are exempt from value-added tax (e.g. insurance brokers). Value-added tax is always due if you sell goods or services. The general rate is 19 per cent; the reduced rate: 7 per cent (e.g. for art and media professions, hotel stays). Typical turnover in certain professional groups that are important for general well-being, such as the health sector, art, culture and education (e.g. doctors and other health professions, chamber orchestras, museums) are exempt from mandatory value-added tax. Find out more.