German municipalities receive almost all of their tax revenue from four different taxes: real property tax, trade tax and shares of value added tax and income tax. Compared with the three latter taxes, real property tax meets the requirements of a rational local tax system in the best way. For...

German corporate companies are taxed with a federal corporation tax and with a local business tax. The latter has a similar, but broader tax base (including e. g. 25 % of interest payments) and its tax rate is set independently by every municipality including the so called city-states...

0ne of the federal government's most important projects is its reform of business taxation, planned for 2008. The key elements of this reform, published in summer 2006, provide for a reduction in the nominal tax burden on corporations from 38.65 % to 29.8 %. In return, an aspect of German...

The German states Bavaria and Hesse have initiated a legal case against the German fiscal equalisation system. The German Federal Constitutional Court has already made rulings concerning this system on three occasions, and thus this new case is not expected to result in major changes....

The Commission of the European Union (EU) has made a new proposal regarding the multiannual fi nancial framework through 2020. Raising expenditures with high added value for the EU (e.g. a trans-European transport network) is one important target of the proposal. Another important issue is a...

In Germany, local authorities charge supply companies with concession dues on gas, water, and electricity (Konzessionsabgaben), which are similar to some local taxes (e.g., local business tax, real property tax). Because these local taxes have already been included in the German fiscal...

Many countries levy local business taxes. In Germany, the ‘‘Gewerbesteuer‘‘ is the main source of local governments’ tax revenue. If there is local taxation of businesses, liberal professionals and farmers should not be treated differently from business enterprises, as it is the case...

Taxing local business is a common feature of local public finance in many countries. The German local business tax (Gewerbesteuer) is the main tax revenue source of municipalities in Germany. Liberal professionals, however, have traditionally been exempted from it. In the past, the German...

With the 2008 reform of business taxation (Unternehmensteuerreform 2008) a preferential treatment of retained earnings for non-incorporated companies was introduced: Earnings may be retained at a preferential tax rate (29.8%) and will be subjected to supplementary tax (26.4%) when they will be...

German corporated companies are taxed with a federal corporation tax and with a local busi-ness tax. The latter has a similar, but broader tax base (including e.g. 25% of interest pay-ments) and its tax rate is set independently by every municipality including the so called city-states...