What role does the legal form of my company play for corporate tax?
August 24, 2023 | 40,00 EUR | answered by Benjamin Hohenadel
Dear tax advisor,
I am Gertrud Schlosser and have been running a medium-sized company in the form of a GmbH for several years. So far, I have mainly focused on my business and have paid less attention to tax matters. Now it is time to file the corporate tax return and I am wondering what role the legal form of my company plays in corporate tax.
I have heard that the legal form of a company can have an impact on the amount of corporate tax. Is that true? What are the advantages and disadvantages of choosing a GmbH as the legal form in terms of corporate tax? Are there any specific pitfalls that I, as a GmbH owner, should be aware of?
I am concerned that I may not be able to fully utilize tax benefits or even fall into a tax trap. Therefore, it would be very helpful for me if you could explain in more detail how the legal form of my company affects corporate tax and what measures I can take to optimize my tax situation.
Thank you in advance for your support and advice.
Sincerely,
Gertrud Schlosser
Dear Mrs. Schlosser,
Thank you for your inquiry regarding corporate tax and the role that the legal form of your medium-sized company, a GmbH, plays in this matter. It is understandable that tax issues can often be complex and confusing, especially if you have not dealt with them much before. I am happy to assist you in answering your questions and helping you with the corporate tax declaration.
The legal form of a company does indeed have an impact on the amount of corporate tax. A GmbH is a legal entity and is therefore subject to corporate tax, which is levied on the company's profits. In contrast, partnerships such as GbR or OHG are subject to income tax. The tax rate for corporate tax is currently 15% for companies with profits up to 1 million euros and 25% for profits over 1 million euros.
One advantage of choosing a GmbH as the legal form is limited liability, as the shareholders are only liable up to the amount of their contributions. Additionally, the GmbH can act as a separate legal entity and enter into contracts, which often builds trust with business partners. However, there are also disadvantages, such as higher costs and greater administrative effort compared to partnerships.
There are certain tax planning opportunities to optimize your tax situation, such as utilizing tax depreciation, creating reserves, or choosing the optimal distribution of profits to shareholders. It is important to comply with all tax regulations and avoid potential pitfalls to avoid any tax disadvantages.
I am available for a detailed consultation to analyze your tax situation and provide you with individual solutions. Please do not hesitate to contact me to schedule an appointment for an online consultation.
Best regards,
Benjamin Hohenadel
