What tax reductions apply to businesses for trade tax?
December 8, 2022 | 30,00 EUR | answered by Eva Heuser
Dear Tax Advisor,
My name is Petra Maier and I am the owner of a small business. For some time now, I have been dealing with the topic of trade tax and have noticed that there are various tax reductions that companies can take advantage of. Since I would like to reduce my tax burden, I am looking for information on the possible reductions.
Currently, I am paying a high amount of trade tax and I am concerned that this could burden my financial situation. Therefore, I would like to know which tax reductions apply to companies in terms of trade tax and whether my company could potentially benefit from them.
I have already done some research, but the information on the internet is often contradictory and not specific enough. Therefore, it would be very helpful if you could explain to me exactly what reductions are available, under what conditions they apply, and how I as a business owner can benefit from them.
It is very important for me to take advantage of the opportunities to reduce my trade tax burden in order to improve my financial situation and lead my company to long-term success. I would greatly appreciate your expert advice and information on this topic.
Best regards,
Petra Maier
Dear Mrs. Maier,
Thank you for your inquiry regarding trade tax and possible tax reductions for companies. I understand your concerns regarding high tax burden and will gladly explain in detail what reductions are available and how you, as a business owner, can benefit from them.
Firstly, it is important to know that trade tax is a local tax paid by companies on their trade profits. It is one of the most important sources of revenue for municipalities and cities in Germany. The amount of trade tax depends on the trade profit and the trade tax multiplier of the respective municipality.
There are various tax reductions that companies can benefit from. One of the most well-known is the so-called exemption threshold regulation. Companies that generate a trade profit below the exemption threshold are exempt from trade tax. The current exemption threshold is 24,500 euros and is granted upon request.
Furthermore, there are options for additions and reductions that influence the assessment basis of trade tax. For example, certain expenses such as interest or rent can be added or subtracted to reduce the tax burden. Investments in certain industries or regions can also lead to tax reductions, for example within the framework of funding programs.
It is important that you, as a business owner, take advantage of all opportunities to reduce your trade tax burden. I recommend contacting an experienced tax advisor who can provide you with individual advice. A tax advisor can analyze your tax situation, examine possible reductions, and provide you with specific recommendations on how to optimize your tax burden.
I hope this information is helpful and that with the help of a tax advisor, you can take advantage of relevant tax reductions for your business to improve your financial situation and lead your business to long-term success.
Best regards,
Eva Heuser, Tax Advisor
