How can I, as an internationally operating company, optimize corporate tax?
February 20, 2023 | 40,00 EUR | answered by Mia Köhler
Dear Tax Advisor,
I am Ralf Schwaru, CEO of an internationally operating company based in Germany. In recent years, we have successfully expanded and grown our business, leading to increased revenues and profits. Now we are faced with the challenge of optimizing our corporate tax in order to reduce our tax burden and maximize our profits.
Currently, we are paying a significant amount of corporate tax due to the different tax systems and regulations we encounter as a result of our international activities. We are particularly concerned about the high tax rates and the complexity of international tax laws. We would like to know how as a company we can optimize our corporate tax to minimize our tax burden and strengthen our competitiveness.
We have already considered various options such as utilizing tax havens or restructuring our corporate structure. However, we are unsure which measures are best suited for our company and what tax risks are associated with them. Therefore, we would like to hear from you what specific steps we can take to optimize our corporate tax and what legal framework needs to be considered.
We are willing to invest in professional advice to find a tailored solution for our company. Therefore, we would appreciate your assessment and recommendations on how we can improve our tax situation.
Thank you in advance for your support.
Sincerely,
Ralf Schwaru
Dear Mr. Schwaru,
Thank you for your inquiry regarding the optimization of your corporate tax as the managing director of an internationally operating company in Germany. I am pleased to see that you are looking into this matter and seeking ways to reduce your tax burden and maximize your profits.
Corporate tax is a tax imposed on the income of legal entities such as GmbHs, AGs, or associations. In Germany, the current corporate tax rate is 15%, plus a solidarity surcharge of 5.5% and potentially the trade tax, which varies depending on the municipality. Due to your international activities, you are likely also subject to taxation in other countries, which makes the tax situation even more complex.
There are various ways to optimize your corporate tax that should be tailored to your company. One option could be to use tax havens, countries with low tax rates, to shift profits in a tax-efficient manner. However, caution is advised as many countries take measures against tax avoidance and sanction aggressive tax planning.
Another option could be to restructure your corporate structure to gain tax advantages. By establishing subsidiaries or holding structures, you can take advantage of tax benefits and reduce the tax burden. However, careful planning and implementation are necessary to avoid tax risks and comply with legal regulations.
It is important that you seek professional tax advice to find a customized solution for your company. An experienced tax advisor can analyze your individual situation, develop tax-optimized structures, and support you in implementation. Additionally, they can inform you about tax risks and help you comply with legal regulations.
In any case, it is advisable to address the issue of corporate tax early on and develop a long-term tax strategy to improve your tax situation and strengthen your competitiveness. I am available for a detailed consultation and look forward to working with you to develop an optimal solution for your company.
Best regards,
Mia Köhler, Tax Advisor
