Germany has not, at national and central level, a gradual and consistent tax rate for companies.

The overall average tax burden is under 30 percent, with some local municipalities that offer significantly lower rates again.

Therefore, Germany has one of the most competitive tax systems among the major industrialized countries.

The companies are generally taxed at two levels:

1. Companies – such as limited liability company (GmbH) or public limited company (AG) – are subject to corporate (Körperschaftssteuer income), while the partnerships are subject to the personal income tax ( Einkommensteuer). Both taxes are levied by the federal government.

2. All business transactions – companies and partnerships alike – are subject to the tax on trade (Gewerbesteuer), imposed by local municipalities (the city where the company is based). Trade tax is for all business operations as a result of the fixed and variable components, the overall tax burden can vary up to 10 percent between the positions.