Do I have to pay tax when starting a company in Germany?

There are many reasons why people decide to start a company in Germany. It could because they are citizens or resident in Germany. It could also be because of the good infrastructure and easy access to other markets within the European Union and the world. However, like every other country in the world, there are steps that you must take before starting a business in Germany. Fortunately, the steps are not too difficult.

If you are wondering if you need to pay any tax when opening or starting a company in Germany, the answer is no. The process of starting a company in Germany does not require you to pay tax. This does not mean that there are no registration costs that you have to pay when starting a business in Germany as there are quite a few registration costs. It also does not mean you won’t pay tax after starting the business as you would be required to pay tax when your business starts running.

Based on the meaning of tax, which is a certain percentage of your income or in the case of business, a certain percentage of your profit, your business must have started running before you will have to pay tax. You can read reviews of financial German services as provided by other Germans on to know which financial services can help you with filing and paying your taxes.

What does it cost to start a business in Germany?

The cost of starting a business in Germany is dependent on the type of business that you want to start. The types of companies you can start in Germany include German GMBH which you cannot transfer to the general public or carry out stock market registration for and AG-German Joint Stock Company, which is a type of company registration for large businesses. Other types of company you can register in Germany include the AG-German Joint Stock Company, German Limited Partnership, Sole Trader, and Branch.

To start a business in Germany, you will be expected to pay applicable registration costs and deposit the required capital in a bank. The amount you are required to pay when you want to form a company in Germany is about 1,800 euros. If you are opting for a virtual office, you will have to pay about 208 euros monthly. A monthly accounting fee of 100 euros will also apply. The registration fee for businesses in Germany would cost about 400 euros in addition to notary fees. A Mini GmBH will require a minimum share capital of 1 euro while a limited liability company will require a minimum share capital of 25,000 euros.

Steps to start a business in Germany

The steps to start a business in Germany include verifying the name of the company, preparing articles of association for the company and bank account opening. You will have to choose the type of company that you want to open based on its purpose and your budget. You might start with a lower company type and upgrade later. Next is to choose a company name that must not be in use by another company in the country. The next thing to do will be the execution of the deed of formation, then share capital deposit and registration of the business.

Tax for businesses in Germany

The taxes for business in Germany are at the local, state and federal level. Generally, the tax rate for corporate organizations in Germany is 15 per cent. There is also another 5.5 per cent solidarity charge that businesses are expected to pay.