Who files it and the headline rate

Any Kapitalgesellschaft — a GmbH, a UG, or an AG — is subject to corporate income tax (Körperschaftsteuer), regardless of how much profit it makes. The rate is a flat 15%, plus a 5.5% solidarity surcharge calculated on the tax itself, for an effective rate of roughly 15.825%.

Trade tax (Gewerbesteuer) is separate and comes on top, set by each municipality, so the combined effective rate on company profit typically lands around 30%. Sole traders and Freiberufler never pay corporate income tax at all — their business profit flows into personal income tax instead. See our comparison of GmbH, UG and sole proprietorship for how that trade-off plays out overall.

From accounting profit to taxable income

The starting point is the profit shown in your annual financial statements under commercial law (HGB). Tax law then adjusts that figure, because the two sets of rules don't always agree on what counts:

  • Non-deductible expenses are added back — trade tax itself, for example, cannot be deducted as a business expense for corporate tax purposes, and only part of certain entertainment costs is deductible.
  • Tax-exempt income is removed — dividends received from another corporation are, in most cases, 95% tax-exempt at the receiving company's level, to avoid taxing the same profit twice as it moves between companies.
  • Valuation differences are applied where tax law and commercial accounting treat an asset or provision differently.
  • Losses from previous years are offset against the current year's profit, subject to minimum taxation rules: losses can generally be carried forward indefinitely, but above a certain amount only part of the remaining profit in any one year can be offset, so a very large loss takes several profitable years to use up fully.

The return itself: forms and deadlines

The corporate tax return is filed on form KSt 1, along with supplementary schedules covering items like the loss carryforward and any special adjustments. It's submitted electronically through ELSTER — see our guide to filing without fluent German if that's a concern — usually as part of the same annual filing bundle as the trade tax return and the annual VAT return.

The standard deadline is 31 July of the following year, extended automatically to a later date when filed through a Steuerberater. Confirm the exact current date, since these deadlines have moved in recent years — our full tax deadlines calendar tracks it alongside every other recurring filing.

Prepayments and the final assessment

Corporate tax is paid mostly in advance, through quarterly prepayments due 10 March, June, September and December, based on the Finanzamt's estimate from your last assessed year. The annual return is where that estimate gets trued up — either a refund if you overpaid, or an additional bill if the prepayments fell short.

If your profit for the current year is tracking well above or below that estimate, you don't have to wait for the return to fix it — you can proactively request an adjustment to your remaining prepayments for the year.

What happens after you file

The Finanzamt reviews the return and issues an assessment notice (Körperschaftsteuerbescheid) confirming the final tax liability. You generally have one month to file a formal objection (Einspruch) if you believe it's wrong. Once that window passes without an objection, the assessment becomes final — though it can still be reopened later if a tax audit finds something that wasn't caught at the time.

This is squarely Steuerberater territory. The adjustments between accounting profit and taxable income involve judgment calls that are expensive to get wrong, which is why almost no GmbH files its corporate tax return without professional help.

Frequently asked questions

What is the corporate income tax rate in Germany?

A flat 15%, plus a 5.5% solidarity surcharge on the tax itself, for an effective rate of roughly 15.825%. Trade tax is separate and comes on top.

Why is my taxable income different from my accounting profit?

Tax law and commercial accounting follow different rules. Some expenses valid for accounting are non-deductible for tax, some income is tax-exempt, and valuation methods can differ, so the HGB profit gets adjusted into a separate taxable income figure.

Do sole traders pay corporate income tax?

No. It applies only to incorporated entities such as a GmbH or UG. A sole trader's or Freiberufler's profit is taxed through personal income tax instead.

Can a GmbH's losses be carried forward indefinitely?

Generally yes, but minimum taxation rules restrict how much can be offset in a single profitable year once losses exceed a certain amount, so a very large loss can take several years to fully use.

What happens after a corporate tax return is filed?

The Finanzamt issues an assessment notice. You generally have one month to object if you disagree; otherwise it becomes final, though a later tax audit can still reopen it.