Who benefits from the EUR 24,500 allowance?

Sole proprietors and partnerships are entitled to a EUR 24,500 trade income allowance. Corporations (e.g., GmbH/UG/AG) are not.

What is the effective trade tax rate?

It equals 3.5% × (municipal multiplier / 100). For example, a 400% multiplier implies an effective 14% trade tax rate.

How do I find my municipality’s Hebesatz?

Consult the latest Realsteuerhebesätze published by the German Federal Statistical Office (Destatis) or your city’s finance department website.

Is trade tax deductible from corporate income tax?

Trade tax is not deductible from the corporate income tax base. For individuals, a credit under Sec. 35 EStG can reduce personal income tax, capped at the trade tax paid.

Can trade losses reduce future trade tax?

Yes. Trade losses can be carried forward for trade tax purposes, subject to German rules. This calculator does not model loss carryforwards.

Does the calculator include add-backs and reductions?

You can enter a net adjustment amount to reflect add-backs and reductions. For detailed add-back rules, consult Sec. 8 and Sec. 9 GewStG.

Is the credit under Sec. 35 EStG automatic?

No. The credit applies to individuals and partnerships via the personal income tax return and is limited to the trade tax actually due and the personal income tax attributable to trade income.

German Trade Tax (Gewerbesteuer) Calculator

Estimate German Trade Tax with professional accuracy. This calculator is built for founders, finance leads and advisors who need a clear, audit-ready breakdown of the trade tax base, the 3.5% base amount, the municipal multiplier (Hebesatz), and the statutory allowance for non-corporate businesses.

Data Source and Methodology

German Trade Tax Act (Gewerbesteuergesetz, GewStG): base rate and allowance. Official publication (Gesetze im Internet). Latest consolidated version: https://www.gesetze-im-internet.de/gewstg/ — Sec. 11 (allowance and 3.5% base rate).
Personal income tax credit for individuals and partnerships: Sec. 35 EStG — https://www.gesetze-im-internet.de/estg/__35.html
Municipal multipliers (Hebesätze): Federal Statistical Office (Destatis), Realsteuerhebesätze (annual). Overview: https://www.destatis.de (search “Realsteuerhebesätze”).

Tutti i calcoli si basano rigorosamente sulle formule e sui dati forniti da questa fonte.

The Formula Explained

\[ \text{Taxable Trade Income} = \max\!\big(0,\ \text{Income} + \text{Net Adjustments} - \text{Allowance}\big) \]

\[ \text{Base Amount (Steuermessbetrag)} = 0.035 \times \text{Taxable Trade Income} \]

\[ \text{Trade Tax} = \text{Base Amount} \times \left(\frac{\text{Hebesatz}}{100}\right) \]

\[ \text{Effective Rate} = 0.035 \times \left(\frac{\text{Hebesatz}}{100}\right) \]

For individuals/partnerships (Sec. 35 EStG) — maximum personal income tax credit: \[ \text{Credit}_{\max} = \min\!\big(\text{Trade Tax},\ 3.8 \times \text{Base Amount}\big) \]

Glossary of Variables

Annual trade income: Your business trade income before trade tax.
Net adjustments: Simplified net of add-backs and reductions per GewStG Sec. 8/9.
Allowance (EUR 24,500): Available to sole proprietors and partnerships (Sec. 11(1) GewStG).
Base amount (3.5%): The “Steuermessbetrag” computed on the taxable trade income (Sec. 11 GewStG).
Municipal multiplier (Hebesatz): Percentage set by the municipality (min. 200%).
Trade tax: Base amount × Hebesatz/100.
Effective rate: 3.5% × Hebesatz/100 (e.g., 400% → 14%).
Sec. 35 EStG credit: Max. personal income tax credit for individuals/partnerships, capped at trade tax paid.

Worked Example: A Step-by-Step Walkthrough

How It Works: A Step-by-Step Example

Assume a partnership with annual trade income of €150,000, net adjustments of €5,000, and a municipal multiplier of 410% (Berlin).

Allowance: €24,500 applies (partnership).
Taxable trade income: max(0, 150,000 + 5,000 − 24,500) = €130,500.
Base amount: 0.035 × 130,500 = €4,567.50.
Trade tax: €4,567.50 × (410/100) = €18,726.75.
Effective rate: 0.035 × (410/100) = 14.35%.
Potential Sec. 35 EStG credit: min(€18,726.75, 3.8 × €4,567.50 = €17,356.50) = €17,356.50.
Net trade tax after max. credit: €18,726.75 − €17,356.50 = €1,370.25 (subject to personal income tax cap).

Frequently Asked Questions (FAQ)

Which entities can use the €24,500 allowance?

Sole proprietors and partnerships qualify. Corporations (GmbH/UG/AG) do not.

How do I determine my municipality’s Hebesatz?

Use the latest “Realsteuerhebesätze” from Destatis or your city’s website. When in doubt, ask your tax office (Finanzamt).

Why is the effective rate different across cities?

Each municipality sets its own Hebesatz. The national base rate is fixed at 3.5%, but the local multiplier drives the final rate.

Does this tool account for all add-backs and reductions?

It provides a single net adjustment field for planning. Complex cases may require line-by-line modeling under Sec. 8/9 GewStG.

Is the Sec. 35 EStG credit guaranteed?

No. It applies only to individuals/partnerships and is limited by the trade tax due and the personal income tax attributable to trade income.

Are loss carryforwards included?

No. Loss carryforwards can reduce future trade tax bases, but they are not modeled here.

Is trade tax deductible from corporate tax?

No. Trade tax is not deductible from the corporate income tax base; however, individuals may benefit from the Sec. 35 EStG credit.

Tool developed by Ugo Candido. Content verified by CalcDomain Editorial Board.
Last reviewed for accuracy on: September 14, 2025.