Is there a trade tax exemption for start-ups?
February 3, 2023 | 50,00 EUR | answered by Isabel Möller
Dear Sir or Madam,
I am Hilde Endres and I recently founded a start-up. We are a young company in the sustainable fashion industry and are still at the beginning of our business activities. I have heard that there may be a trade tax exemption for start-ups and I am wondering if our company could qualify for it.
Currently, we are still in the start-up phase and are not generating large profits yet. However, we are already active in the market and have generated some initial revenues. As the founder, trade tax is a concern for me as I am unsure of how high the tax burden will be for our start-up and if there may be a way to reduce it.
So my question to you is: Is there indeed a trade tax exemption for start-ups like ours? If so, what requirements must be met in order to benefit from this exemption? And how can I, as the founder, actively contribute to minimizing the trade tax burden for our company?
I look forward to your expertise and thank you in advance for your support.
Sincerely,
Hilde Endres
Dear Mrs. Endres,
Thank you for your inquiry regarding the exemption from trade tax for start-ups. As a tax advisor specializing in trade tax, I am happy to assist you and provide you with the relevant information.
In general, there is indeed a possibility for start-ups to benefit from an exemption from trade tax. This possibility is called "trade tax exemption amount" and is currently 24,500 euros. This means that companies that generate a trade profit below this amount are exempt from trade tax. This exemption amount applies to natural persons, partnerships, and legal entities under private law, including start-ups.
However, in order to benefit from this exemption from trade tax as a start-up, certain requirements must be met. Firstly, it must be a newly established company that has been active on the market for no longer than five years. Secondly, the trade profit must be below the exemption amount of 24,500 euros. Additionally, you must ensure that your company does not engage in certain activities that are excluded from the trade tax exemption, such as renting out or leasing real estate or investments.
As a founder, you can actively contribute to minimizing the trade tax burden for your company by, for example, ensuring that your expenses and costs are optimized to keep the trade profit low. It may also be beneficial to consider tax optimizations and investments in operating expenses to reduce the tax burden.
I hope this information helps you and answers your question regarding the exemption from trade tax for start-ups. If you have any further questions or require detailed advice, I am at your disposal.
Best regards,
Isabel Möller
