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Trade tax liability for rental income of a residential GmbH

March 25, 2021 | 60,00 EUR | answered by Steuerberater Knut Christiansen

Dear Sir or Madam,

we kindly ask you to answer the following question regarding our situation.

Our starting point is a real estate GmbH.

The GmbH has acquired a property, which will be developed next year by a third (external) company with a multi-family house, and the apartments will be rented VAT-free (to private tenants, not companies).
Currently, the GmbH receives rental income from 6 existing garages on the aforementioned property, approximately 4,800.00 EUR/year.

The goal is to rent out the individual apartments after the completion of the property, around the end of 2022, but not to sell them. This has already been communicated to the trade office, so that a business registration for the GmbH was not required.

Our question now is:

1.) Is the GmbH liable for trade tax? If yes, does the GmbH have to file a trade tax return? If this is the case, what exactly needs to be stated in the tax return? (Answer please preferably with references to specific sections of the law)

2.) If not, does an application for exemption from filing a trade tax return due to pure real estate management need to be submitted? (Answer please preferably with references to specific sections of the law)

Thank you in advance.

Best regards,
Petro

Steuerberater Knut Christiansen

Hello,

a GmbH is by legal form a commercial enterprise (§ 2 para. 2 GewStG). Therefore, it is also obliged to submit a trade tax return. However, if the GmbH only manages its own real estate, the trade income can be reduced according to § 9 No. 1 sentence 2 GewStG. In this case, no trade tax would be incurred (extended trade tax reduction). The corresponding income (= profit from rental) would then have to be entered in line 70 of the trade tax return.

An application for non-submission of the trade tax return cannot be made, as the tax office must always be able to check whether the conditions for the extended trade tax reduction are met and can be granted.

I hope this answers your questions. Please feel free to contact me if you have any further questions.

Best regards,

Knut Christiansen
Tax consultant