What tax-free allowances apply for trade tax?
May 9, 2024 | 40,00 EUR | answered by Isabel Möller
Dear tax advisor,
my name is Yvonne Eberstark and I operate a small business in the textile industry. Over the past few years, I have been able to steadily expand my business and have been experiencing increasing profits. However, I am now facing the problem that my trade tax burden is constantly increasing and I am worried about how to manage this additional financial burden.
I have heard that there are exemptions for trade tax that might help me reduce the tax burden. However, I am unsure about which exemptions apply and whether I am even eligible to benefit from these exemptions. I would like to learn more about the exemptions for trade tax in order to explore possible solutions to reduce my tax burden.
Could you please explain to me which exemptions apply to trade tax and under what conditions I can claim them? Are there specific regulations for small businesses like mine that could help me minimize my tax burden? I would greatly appreciate your support and expertise in this matter.
Thank you in advance for your assistance.
Sincerely,
Yvonne Eberstark
Dear Mrs. Eberstark,
Thank you for your inquiry regarding the tax allowances for trade tax. It is understandable that you are concerned about the increasing tax burden, especially as your company continues to grow and generate profits. It is important to be aware of the various options for reducing trade tax in order to minimize your financial burden.
First and foremost, I would like to explain that there are indeed tax allowances for trade tax that can help you lower your tax burden. One important allowance is the basic allowance, which applies to all tradespeople. The basic allowance is currently €24,500 per year. This means that as a tradesperson, you do not have to pay trade tax up to this amount.
Additionally, there is also an allowance for small businesses known as the "allowance for small tradespeople." This allowance is currently €5,000 per year. In order to qualify for this allowance, your company must meet certain requirements. For example, you must meet the size criteria for small businesses according to § 267 para. 1 HGB. This means that your company must not have had more than €500,000 in revenue and €50,000 in profit in two consecutive fiscal years.
If your company meets these requirements, you can claim the allowance for small tradespeople and further reduce your trade tax burden. It is important to take advantage of all opportunities for tax optimization to improve your financial situation.
I hope my explanations are helpful to you and that you can make use of the allowances for trade tax for your company. If you have any further questions or need assistance, I am happy to help.
Best regards,
Isabel Möller
