Reduce tax costs: Benefit from one of the lowest trade taxes in Germany
TRADE TAX MONHEIM
Not only nationwide, but also within the federal states, there are considerable differences in the determination of the trade tax rate – depending on the city or municipality. The lowest trade tax rate in NRW is 250% in Monheim am Rhein (unchanged since 2018). The highest at 580 (Oberhausen trade tax) – more than double. That is why the choice of location is also an important decision for a company. It is not for nothing that Monheim am Rhein is considered a “tax haven” for many companies.
But what can you do if – especially young start-ups – cannot afford a prestigious company headquarters? That’s where we come in: at Urban Office Space you can easily rent your company headquarters. Completely flexible: whether for a short period or long-term.
By relocating your company headquarters to Monheim, you will also benefit from a low assessment rate and thus reduce your tax burden (trade tax) – a clear competitive advantage! This is because the average tax burden in NRW is the highest in Germany.
Trade tax calculator
How is trade tax calculated – and what advantages does Monheim am Rhein offer as a location?
1) Determine trade tax multiplier
The lifting rate depends on the city or municipality in which your company’s registered office is located. In our example, Monheim am Rhein, the assessment rate is 250% – one of the lowest trade tax rates in the whole of Germany. Elsewhere this is much higher, e.g. 520% (trade tax Duisburg)
2) Trade income
The next assessment basis for trade tax is your company’s trade income. For the sake of simplicity, we expect income of EUR 1,000,000 (1 million)
3) Tax base
The tax base for trade income is a uniform 3.5% in accordance with the GewStG. The tax assessment amount is therefore 3.5% of the trade income. [Our example: EUR 1,000,000 x 3.5% = EUR 35,000]
Calculation of trade tax:
The trade tax is now calculated by multiplying the trade tax multiplier (Monheim am Rhein: 250%) by the tax assessment amount (here: EUR 35,000). [Our example: EUR 35,000 x 250% = EUR 87,500].
For comparison: In the “most expensive” city in NRW, your trade tax would be EUR 203,000.
As you can see, there is enormous potential for savings if you choose a tax-optimized location.