German Gewerbesteuer (trade tax) applies to every business — from sole traders to GmbHs. Our trade tax calculator computes the tax base amount, trade tax liability and income tax credit instantly and for free.
What is Gewerbesteuer?
Gewerbesteuer is a municipal business tax levied on a company's trade income (Gewerbeertrag). It is regulated by the Gewerbesteuergesetz (GewStG) and is the most important revenue source for German municipalities. Unlike income tax, it does not depend on personal circumstances — only on business profit and the local multiplier.
Formula: How to Calculate German Trade Tax
Trade tax is calculated in three steps:
- Trade income = Profit − Exemption threshold (€24,500 for sole proprietors only)
- Tax base amount = Trade income × 3.5% (Steuermesszahl, §11(2) GewStG)
- Trade tax = Tax base amount × Municipal multiplier / 100
Exemption Threshold: €24,500 for Sole Proprietors
Sole proprietors and partnerships benefit from a €24,500 exemption under §11(1) GewStG. The first €24,500 of trade income is tax-free. Corporations (GmbH, AG) receive no exemption.
| Legal Form | Exemption |
|---|---|
| Sole Proprietor / Partnership | €24,500 |
| GmbH / Corporation | €0 |
Tax Base Rate: 3.5% Nationwide
The Steuermesszahl is a uniform 3.5% across Germany (§11(2) GewStG), unchanged since 2008. It applies to all businesses regardless of legal form or location.
Municipal Multiplier (Hebesatz): The Key Variable
The Hebesatz determines how much trade tax a municipality collects from the tax base amount. It must be at least 200% under §16 GewStG. In practice, it varies significantly:
| City | Hebesatz |
|---|---|
| Berlin | 410% |
| Hamburg | 470% |
| Munich | 490% |
| Frankfurt | 460% |
| Cologne | 475% |
| Stuttgart | 420% |
| National average | approx. 400% |
Worked Example: Sole Proprietor with €80,000 Profit
A sole proprietor earns €80,000 annual profit. The municipality applies a 400% Hebesatz.
- Trade income = €80,000 − €24,500 = €55,500
- Tax base amount = €55,500 × 3.5% = €1,943
- Trade tax = €1,943 × 400% / 100 = €7,770
Income Tax Credit §35 EStG: Relief for Sole Proprietors
Sole proprietors and partners can offset paid trade tax against their income tax liability under §35 EStG. The credit equals 4× the tax base amount.
In the example above:
- Credit = 4 × €1,943 = €7,770
- At a 400% Hebesatz, the credit exactly offsets the trade tax — the net additional burden is zero.
- Above 400%, a residual net burden remains.
Note: Corporations cannot offset Gewerbesteuer against corporate income tax (Körperschaftsteuer).
GmbH: No Exemption, No Credit
For a GmbH with €80,000 profit and a 400% Hebesatz:
- Trade income = €80,000 (no exemption)
- Tax base amount = €80,000 × 3.5% = €2,800
- Trade tax = €2,800 × 4 = €11,200
Trade tax is a deductible business expense for the GmbH and reduces taxable corporate income.
Trade Tax and Income Tax Together
For sole proprietors, the combined view matters: planning Gewerbesteuer and income tax together reveals the true tax burden. At a 400% Hebesatz, trade tax and the §35 credit cancel out — the effective additional burden from trade tax approaches zero. Above 420%, the gap widens with each percentage point.
Calculate Now
Use our trade tax calculator to compute your tax base amount, Gewerbesteuer and income tax credit instantly. You can also calculate your income tax right after.