German companies soon benefit from the advantages of falling corporate tax?

The European Union has taken a new initiative on the European fiscal policy. Explicitly, the hot potato of the business tax has been taken up by the EU Commissioner Algirdas Semetas hope so too Germany may have to resort to less soon in your pocket when it comes to the payment of corporate taxes.

Planned disclosure of corporate tax

Among the changes to the company’s control, it should explicitly be about to reveal to all 27 of the European Union countries belonging to the base of their corporate taxes. It was suggested a transparency can be produced which should eventually lead to tax harmonization and create an incentive for further initiatives may, in the opinion of some EU diplomats. As a result, the responsible EU members hope that especially the low-tax countries like Ireland for example, would be forced to raise corporate taxes. Germany, however, a country which is not more than a tax haven would now be more competitive, now that the corporate tax can be reduced. Also, it goes from one in Brussels, probably many companies would be taxed where they produce. So far, there is still so that the head office often does not coincide with the production site, but the seat of the company in a so-called tax haven, for example, in Luxembourg to or to Lichtenstein, is moved. While this is good for the low-tax countries, Germany had always at a disadvantage here.


Personal income tax for the planned EU

To address the problem with the company’s total tax more effectively, the EU Commission plans to continue until the year 2014, the introduction of a separate corporation. This is intended to protect profits that go beyond the 70 percent of currently been provided by the individual country budgets. The political influence of the EU countries on the Commission might therefore be lower.

Business taxes are taxes on income

The corporate tax shelters mostly the corporate income tax (CIT short), which is levied on income of legal persons. In general, these are all the income of corporations and associations but also of funds which are collected under the Corporation Act (CITA) by the individual countries of the Federation. The determination of the amount of tax is made on the basis of taxable income, which in turn under the rules of the corporation and the income tax must be addressed. Deduct the allowances for limited taxation, however, the solidarity surcharge credited here with. The corporation has a corporate tax, which is seen as an annual tax, ie, it is only valid for one calendar year to calculate.

Business tax for corporations, cooperatives and Co.

The corporation has a corporate tax that is thus willing to pay for all companies to have a legally regarded as a body, on the other, but also in the domestic tax liability. These include for example, the AG and GmbH, cooperatives and pension and insurance associations, unincorporated associations, institutions and foundations, and other legal persons of private law firms and commercial character, which are run by persons of public law.

Do changes in the company’s tax losses of billions?

If the changes in the corporate tax in force, it is doubtful whether the Federal Republic of Germany will benefit here. Media reports suggest that the federal government has to fear billion shortfall in the corporate tax when companies come up with a loss. Also, the magazine “Financial Times” warns of the loss carryforwards, which would amount to around € 1,100 billion, which rejects the Treasury, however.

Soon business taxes up to the Federal Constitutional Court?

Whether and to what extent corporate taxes in the EU in terms of changes to the German company, and thus impact on the German economy, remains to be seen accordingly. Critics believe that the legislature will be forced soon to change the law in favor of the individual companies. The only way to quell the threat of billions of losses in the bud.