How is trade tax taken into account when calculating corporate tax?
February 18, 2023 | 40,00 EUR | answered by Mia Köhler
Dear tax advisor,
my name is Sven Götzinger and I run a small GmbH in the IT consulting sector. I am currently a bit confused about the calculation of corporate tax and specifically about the consideration of trade tax. So far, I have only roughly understood that trade tax is credited against corporate tax, but I still lack the exact details and implications for my company.
Currently, I pay trade tax based on my trade income and receive a trade tax assessment base. How is this amount now taken into account in the calculation of corporate tax? Does the amount of trade tax I pay also affect the amount of my corporate tax? Or is there a specific formula or calculation method to link the two taxes together?
As a business owner, I am concerned that I may be paying too much or too little corporate tax if I do not correctly consider trade tax. Are there any specific tips or recommendations you can give me to calculate corporate tax optimally while taking trade tax into account?
I would be very grateful if you could explain these connections to me in detail and provide possible solutions. Thank you in advance for your support.
Sincerely,
Sven Götzinger
Dear Mr. Götzinger,
Thank you for your question regarding corporate tax and trade tax in relation to your GmbH in the IT consulting sector. I understand that the calculation and consideration of these two types of taxes can be confusing, so I will try to explain the connections and implications as comprehensively as possible.
Let's start with the trade tax. This is calculated based on the trade income of your GmbH. The trade tax assessment amount is then derived from this calculation. This assessment amount serves as the basis for the calculation of corporate tax. The amount of trade tax you pay indirectly affects the amount of your corporate tax.
Trade tax is credited when calculating corporate tax. The trade tax assessment amount is adjusted by various factors to determine the trade income as the basis for corporate tax. The trade tax assessment amount is adjusted by certain add-backs and deductions to create a tax balance between trade tax and corporate tax.
There is no specific formula that simplifies the calculation of corporate tax taking trade tax into account. These are complex tax regulations that must be applied individually to your GmbH. To ensure that you calculate corporate tax correctly, I recommend consulting with a tax advisor who is familiar with tax optimization for corporations.
A good tip is to regularly review your trade tax payments and their impact on corporate tax and adjust them if necessary. Accurate accounting and documentation of all tax-relevant transactions in your GmbH are crucial.
I hope this explanation has been helpful and I am available for any further questions you may have. Thank you for your trust and attention.
Best regards,
Mia Köhler
