Germany's headline corporate income tax (CIT) rate is 15.825% CIT/solidarity surcharge, plus trade tax 8.75-20.3%.
The headline personal income tax (PIT) rate is 45 plus surcharges.
The standard VAT/GST (or equivalent consumption tax) rate is 19. Registration thresholds, zero-rated and exempt categories, and reduced rates vary by jurisdiction - see the source link below for the full detail on this jurisdiction.
An individual is a German tax resident with unlimited tax liability (worldwide income taxed) if they maintain a domicile (Wohnsitz) in Germany or their habitual abode (gewöhnlicher Aufenthalt) - in practice, presence exceeding roughly six months generally establishes this. Notably, simply retaining the right to use a residence in Germany can be enough to trigger residency even if rarely used. Non-residents are taxed only on German-source income.
Germany's CFC regime under the Foreign Tax Act (Außensteuergesetz, AStG §§7-14) attributes a foreign subsidiary's low-taxed passive income directly to the controlling German shareholder where the subsidiary is deemed an "intermediate company" (Zwischengesellschaft). The low-tax threshold was reduced from 25% to 15% effective 2024 as part of Germany's Minimum Tax Directive implementation, aligning it with the global minimum tax rate - meaning fewer foreign subsidiaries now fall within scope than under the pre-2024 rules. A further 2026 change is expected to exempt CFC taxation where passive income is both under 30% of total income and under EUR 100,000 at the CFC level.
Germany has no formal thin capitalization rule; its substitute is the interest barrier (Zinsschranke, §4h EStG / §8a KStG), which limits deductible net interest expense (interest paid less interest received) to 30% of tax-EBITDA for both corporate and trade tax purposes. A de minimis exemption applies where net interest expense is below EUR 3 million. Following a December 2023 amendment, the rule now aligns with the EU Anti-Tax Avoidance Directive (ATAD) and applies regardless of whether the lender is a shareholder, related party, or third party.
Germany maintains income tax treaties with nearly 90 countries per PwC, covering most industrialized nations, though notable gaps remain - Germany has no income tax treaty with Brazil or Hong Kong, and its treaty with the UAE expired at the end of 2021 without renewal. Full text of Germany's treaties is maintained by the Bundesministerium der Finanzen (Federal Ministry of Finance). For US-specific treaty text, see the IRS Germany Tax Treaty Documents page.