Corporate income tax (KSt)

Corporate income tax – Most legal forms of business are subject to taxation. Depending on the legal form, income tax, corporate income tax, sales tax, trade tax and/or capital gains tax are due by law. Under certain circumstances, it is possible for some companies to be exempt from one or more of these types of tax. Who pays corporate income tax? How much is corporation tax? What do you have to pay corporation tax on?

• Corporate income tax (KSt)

Income tax (ESt)

Income tax – Most legal forms of business are subject to taxation. Depending on the legal form, income tax, corporate income tax, sales tax, trade tax and/or capital gains tax are due by law. Under certain circumstances, it is possible for some companies to be exempt from one or more of these types of tax. How much income tax do I have to pay? How do you calculate income tax? How much income tax do I pay? What do I pay income tax on?

• Income tax (ESt)

Capital gains tax (KapESt)

Capital gains tax – Most legal forms of business are subject to tax. Depending on the legal form, income tax, corporate income tax, sales tax, trade tax and/or capital gains tax are due by law. Under certain circumstances, it is possible for some companies to be exempt from one or more of these types of tax. What percentage is capital gains tax? What is the capital gains tax exemption amount? When is capital gains tax payable? How much is capital gains tax?

• Capital gains tax (KapESt)

Value added tax (VAT)

Value added tax – Most legal forms of business are subject to tax. Depending on the legal form, income tax, corporate income tax, sales tax, trade tax and/or capital gains tax are due by law. Under certain circumstances, it is possible for some companies to be exempt from one or more of these types of tax. What is the value added tax? What is the difference between VAT and sales tax? What is sales tax, simply explained?

• Value added tax (VAT)

Trade tax (GewSt)

Trade tax – Most legal forms of business are subject to taxation. Depending on the legal form, income tax, corporate income tax, sales tax, trade tax and/or capital gains tax are due by law. Under certain circumstances, it is possible for some companies to be exempted from one or more of these types of tax. When is trade tax payable? How much trade tax is payable? Who is subject to trade tax? When do you not have to pay trade tax?

• Trade tax (GewSt)

Tax cycle: taxes simply explained

For those who are confronted with the topic of taxation for the first time, here is a short explanation of the typical “tax cycle”.

Taxes explained simply: taxation of income and profit

Taxes are complex and a simple explanation is hard to come by, but possible if you start by looking at the following:

1. All inputs / outputs are documented (accounting)
2. All income must be taxed
3. Against income, expenses are calculated
4. Monthly submission to the tax office as an “interim balance sheet
5. Annual financial statements as “balance sheet
6. You pay tax on your profits

Calculate profit (simple):

Profit / loss = income – expenses

Example Invoice:

• 10.000 Euro = 100.000 Euro – 90.000 Euro

Here’s another look at the mechanism behind the tax system:

Monthly closing: Regular submission

Regardless of whether it is a company or a private person, once a month “accounts are settled” and once a year an “overall conclusion” is drawn (balance sheet).

Private individuals – Private individuals have relatively little to do with this monthly evaluation. The job is “done” by your employer. The gross salary is your salary before you have paid taxes and social security contributions. In the net salary, everything has already been deducted. Therefore, private individuals, or employees, have the monthly statement and contributions theoretically done automatically. It is different for companies, they have to prepare this “statement” themselves.

Company – The majority of companies submit their figures every month. The so-called monthly statement. Here, the income and expenses are summarized, the whole is then sent to the tax office. Either by the entrepreneur himself or by an appointed tax advisor.

Month End Closing – The month end closing then contains all the income and expenses of the business as just described. This includes all items that are incurred by the company:

• Material purchase
• Power
• Communication costs
• Wages for employees
• Health insurance contributions
• …

Of course, also the income, from delivery and performance but also capital gains. Both are taxed differently! While the income tax, or the trade tax, is relatively high, the capital gains tax is only 25%.

That is why it is worthwhile to let money “work”, through shares, currency trading or much less risky: real estate as a capital investment.

Exceptions (quarterly) – There are a few small exceptions, e.g. if the company is still very small and has little turnover. After a certain period of time, e.g. two or three years, such companies are allowed to submit their sales on a quarterly basis. However, this does not happen with real estate investors.

Annual financial statements: Taking stock

Simply explained, the balance sheet occurs at the end of the year. Just as the monthly financial statement summarizes the calendar days of a month, the annual financial statement summarizes the twelve months of the year. From this, you (or usually your tax advisor) create your balance sheet.

In this balance sheet you can then read all accounts, assets, the most important statements and key figures about your company. In summary, the annual financial statement.

So the control game itself is relatively simple

As soon as you have registered a company, you make a monthly statement of accounts, punctually at the start of the new month, at the latest by the 10th of the following month (deadline). At the end of the year, or at the beginning of the following year, you then prepare the annual accounts, which summarise all your financial and accounting activities.

Want to learn more about taxes? Then read through the different types of taxes above, from personal income tax, to business tax for companies, to capital gains tax, which applies to both individuals and companies. Of course, there are also other special cases, such as payroll tax, and much more.

• Learn taxes

Owner: Save taxes with real estate

Taxes are an important topic. The more you earn, the greater the tax burden. At some point, taxes are your biggest expense. By choosing the right legal form, you can save a lot of money as a landlord or real estate investor. Classics are, for example, the real estate GmbH or the family foundation. Learn more about real estate, taxes and saving taxes with real estate here.

• Save taxes with real estate

Supervisory Board – The controlling body

The supervisory board is the supervisory body of a stock corporation and consists of at least three members. The Supervisory Board is appointed by the Annual General Meeting for a term of four years and is obliged to report to the Annual General Meeting.

More on the other bodies of a public limited company:

• Board of directors
• AGM

Duties of the Supervisory Board – Appointment, Supervision, Dismissal & Co

As the name suggests, the supervisory board is primarily responsible for supervising the management board, in addition to appointing and dismissing the management board. Furthermore, it is responsible for reporting in writing on the annual financial statements after they have been prepared by the management board and audited by the auditors, and it prepares annual reports. Formally, the Supervisory Board issues the invitation to the Extraordinary General Meeting and can submit proposals to the General Meeting on the appropriation of the profits generated.

Tasks of the Supervisory Board at a glance:

• Reporting to the Annual General Meeting
• Appointment of the Management Board
• Supervision of the Management Board
• Dismissal of the Management Board
• Written reporting
• Preparation of annual reports
• Invitation to the Extraordinary General Meeting
• Proposal for the appropriation of profits

The members of the supervisory board are registered in person with the registration court and at least the chairman of the supervisory board must also be listed by name on the AG’s business letters. Upon taking up their office, supervisory board members may not simultaneously act as members of the management board of their company, and they are also prohibited by the prohibition of cross-linking from being appointed as a member of the management board of another company. Remuneration is paid to all members of the Supervisory Board in accordance with the Articles of Association or the amount is decided at the Annual General Meeting.

AG: foundation, legal form, special case real estate

1. Stock corporation (AG)
2. Real estate stock corporation (REIT-AG)
3. Real estate company

Stock corporation (AG): Formation, liability, legal form & Co.

Aktiengesellschaft (AG) – The stock corporation is a German legal form founded by at least one person and organized by different bodies. Instead of a managing director, the company is managed by a board of directors consisting of at least one person. As the name already indicates, this legal form of a company primarily stands for stock trading. You would like to start a company alone or together with other people and learn more about company law forms in advance? Then you’ve come to the right place!

• Stock corporation (AG)

Real estate stock corporation (REIT-AG)

Real estate stock corporation / REIT-AG – You don’t find the idea of a stock corporation bad at all and are now wondering how you can combine your capital company with the real estate industry? A real estate company is a company that serves the financing, development, realization, leasing, or marketing of real estate – starting with a single property up to a real estate portfolio in the three or multi-digit range. The management of real estate property or third-party real estate on behalf of third parties can also be handled by a real estate company.

• Real estate stock corporation (REIT-AG)

Real Estate GmbH & Asset Management GmbH

Alternative – In this article you will learn the basics about real estate companies. Briefly explained, a real estate company is a company that has the purpose of leasing, developing, financing, realizing and/or marketing. It doesn’t matter if it is one or more properties. The management of residential and commercial real estate – in its own interest or as a service offered to third parties – is also a popular focus for real estate companies and asset management GmbHs. Find out more about the main advantages and disadvantages of buying real estate and the expected costs.

• Real estate company