Are there ways to reduce the trade tax burden?
June 2, 2024 | 30,00 EUR | answered by Eva Heuser
Dear tax consultant,
My name is Dora Weinert and I am the owner of a small company in the IT industry. In recent years, my trade tax burden has steadily increased and is now significantly impacting my financial situation. I am wondering if there are ways to reduce the trade tax burden in order to improve my liquidity and continue to successfully run my business.
Currently, I am paying a high trade tax due to the profits of my company, which have significantly increased in recent years. I am concerned that the rising trade tax burden could affect my competitiveness and therefore would like to learn about ways to reduce the trade tax burden.
I have already heard about various tax planning options such as forming reserves or utilizing loss carryforwards, but I am unsure which measures are suitable in my specific case and how to implement them. Therefore, I would like to hear from you what specific steps I can take to reduce my trade tax burden and improve my financial situation.
I look forward to your professional advice and thank you in advance for your support.
Best regards,
Dora Weinert
Dear Mrs. Weinert,
Thank you for your inquiry regarding the reduction of your trade tax burden. As a tax advisor with many years of experience in advising companies in the IT industry, I can show you various ways in which you can optimize your trade tax burden.
First and foremost, I would like to emphasize the importance of taking a holistic view of your tax situation. In addition to trade tax, income tax, sales tax, and other tax aspects also play a role. Therefore, individual advice based on your specific company figures is essential.
One way to reduce your trade tax burden is to set up reserves. By setting up reserves, you can defer profits into the future for tax purposes and reduce your tax burden. However, it is important to note that there are legal requirements regarding how reserves can be set up and what maximum limits apply.
Furthermore, loss carryforwards can be used to reduce the trade tax burden. If your company has incurred losses in the past, these losses can be offset against future profits to reduce the tax burden. It is also important to pay attention to the exact regulations and correctly use the loss carryforwards.
Another way to optimize your trade tax burden is to choose the legal form of your company. Depending on the legal form (e.g. sole proprietorship, GmbH, GmbH & Co. KG), different tax advantages and disadvantages arise. Therefore, restructuring your company may be advisable in order to take advantage of tax optimization potentials.
In addition, there are other tax planning options such as investing in business assets or utilizing tax incentives and subsidies. Again, individual advice is crucial to identify the measures that are suitable for your company.
In a personal consultation, I would be happy to explain further details about the mentioned options and develop a customized plan with you to reduce your trade tax burden. Please do not hesitate to schedule an online consultation appointment.
I look forward to supporting you in optimizing your tax situation and am available for any further questions.
Sincerely,
Eva Heuser
Tax Advisor
