Germany, which is Poland’s largest trading partner, operates balanced taxation, which falls within average European figures, while being the largest European economy. With a high institutional culture and stable economic growth, they are a good investment location.

Taxes in Germany

A company is deemed to be a tax resident in Germany if its place of incorporation or principal place of management is in Germany.
A corporation that does not meet either of these criteria will be considered a non-resident, whose tax obligations will be limited to its income from German sources .
The total and effective corporate income tax rate in Germany is 15.825%.
However, there is also a trade tax in the Federal Republic of Germany, the amount of which depends on the location of an enterprise. This tax can range from 3.5% to as much as 20.3%.
The basis for the trade tax is the adjusted profit for income tax purposes: in particular, 25% of all financing costs above €200,000 (EUR), including hidden financing costs in the form of leases, rents and royalties, are added back to the taxable income.
Considering both taxes, it should be assumed that the average tax for companies in Germany is around 30%.
The base VAT rate in Germany is 19%.

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FAQ

  • HOW TO CHOOSE THE RIGHT COUNTRY TO MOVE TO?

    Moving abroad is a highly significant step in life. Tax issues should come as the last matter to be considered. Think about where you would like to live, where your children should go to school and where you want to run a business. Only after honestly answering these questions, can you decide which country will be the most suitable for all your needs.

  • WHAT FORMALITIES DO I HAVE TO COMPLETE WHEN MOVING OUT OF POLAND?

    There are many formalities, and they depend primarily on the current situation. The aim should be to completely sever all ties with Poland. 

  • DO I HAVE TO FILE A TAX RETURN IN POLAND AFTER MOVING AWAY?

    Tax returns in Poland are submitted by Polish residents or persons earning income in Poland who are residents of another country. It all depends on whether you have successfully relinquished your Polish residence. And if you have, it also depends on the kind of income you earn in Poland.

  • WILL I PAY TAX IN POLAND BECAUSE OF RELOCATING THE COMPANY ABROAD?

    The question is about the broad subject of exit tax. First of all, you need to verify what moving the company abroad actually means. It can be both the relocation of the registered office of the company and the personal move of the entrepreneur – a natural person. The tax implications of both situations may be significantly different.

  • CAN I TRANSFER THE COMPANY'S ASSETS TO THE DESTINATION COUNTRY TAX-FREE?

    The general limit below which you do not have to pay exit tax in Poland is PLN 4 million. Nevertheless, it is always necessary to check this issue because the transfer of the company’s assets to the destination country will not always mean the same thing.