The Income Tax Burden on Corporations in Germany

In an international comparison, Germany is a high-tax country. At around 30 %, the nominal tax burden for German corporations is almost ten percentage points above the EU average. Some assume that corporations‘ actual tax burdens are significantly reduced due to tax planning and profit shifting. However, this article shows, based on information from corporation and trade tax statistics, the real tax burden can be five to twelve percentage points higher than the nominal burden due to incomplete loss offsetting, the limited deduction of financing expenses and the (partial) taxation of corporate dividends.