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Trade tax in interaction with income tax

January 30, 2014 | 30,00 EUR | answered by StB Patrick Färber

Question about trade tax in combination with income tax (§35 EStG):

If I have a commercial profit and therefore have to pay trade tax for the relevant year (municipal tax rate 330) and would also actually have to pay income tax, but due to the loss of my wife's company I do not have to pay income tax for the relevant year, is there any chance to get back the amount of trade tax paid (or partially) from the tax office (or elsewhere)? Would it be right and fair if so?

I might have further questions then...

Thank you
Albert Hunklinger

StB Patrick Färber

Dear inquirer,

Based on your information and considering your efforts, I can inform you that in your case there is no possibility to credit or refund the paid GewSt.

§ 35 EStG is meant to mitigate the double burden of GewSt and ESt. Up to a tax rate of approximately 400%, GewSt is neutralized by crediting it against ESt.

However, in your situation - presumably through joint assessment - if you do not pay any ESt through loss offsetting on the ESt level, then nothing can be credited or refunded. The crediting according to § 35 ESTG is ineffective.

I regret not being able to provide a more favorable answer.

Best regards,

Tax Advisor Patrick Färber