How can I avoid business tax if I am operating internationally?
April 10, 2023 | 40,00 EUR | answered by Jens Meier
Dear Mr. Köhler,
I have been operating internationally for several years and have noticed that my business tax burden in Germany has significantly increased. I run a medium-sized company that operates both in Germany and abroad. In recent years, I have found that business tax makes up a substantial portion of my tax burden, which concerns me more and more.
I am wondering if there are ways to avoid or at least minimize business tax when operating internationally. I have already considered various options, such as relocating the company's headquarters abroad or restructuring my business. However, I am unsure which measures are truly effective and what legal and tax consequences they may entail.
I would like to know if there are legal and tax acceptable solutions to reduce the business tax burden without violating any laws. I would greatly appreciate your support and expertise in this area to find the best possible solution for my company.
Thank you in advance for your help and advice.
Sincerely,
Dirk Köhler
Dear Mr. Köhler,
Thank you for your inquiry regarding the trade tax burden of your internationally active medium-sized company. It is understandable that you are concerned about the increasing tax burdens in Germany and are looking for ways to minimize them. I would like to present you with some possible solutions to reduce your trade tax burden without violating applicable law.
First of all, it is important to know that trade tax in Germany is a municipal tax levied by the municipality where your company is based. Therefore, relocating the company's headquarters abroad could be a way to avoid trade tax. However, this option is associated with significant legal and tax consequences and should therefore be carefully considered. It is advisable to seek advice from an experienced tax advisor or lawyer to assess potential risks.
Another possibility to reduce the trade tax burden could be to restructure your company. It might be beneficial to establish subsidiaries abroad or separate existing business areas to distribute the trade tax burden across multiple locations. Once again, professional advice is essential to make tax optimizations and minimize potential risks.
There are also legal options such as using tax exemptions or optimizing business processes to reduce trade tax. A good tax advisor can help you make individual tax optimizations and find the best solution for your company.
Lastly, I want to emphasize the importance of always complying with applicable law and avoiding illegal tax practices. With professional advice, you can ensure that your tax measures are in line with the law and ultimately lead to a reduction in your trade tax burden in the long term.
I am happy to answer any further questions and provide detailed advice. Thank you for your trust, and I look forward to assisting you in optimizing your trade tax burden.
Sincerely,
Jens Meier, Tax Advisor
