Setting up a business - Ways to self-employment

Which taxes do you pay?

You should go into the topic of taxes before even starting up your actual business. Please also enlist the assistance of a tax consultant [Steuerberater] when so doing.

You should be aware of these types of tax:

  • Turnover or input tax [Umsatz- bzw. Vorsteuer]
  • Income tax [Einkommensteuer]
  • Trade tax [Gewerbesteuer]
  • Corporation tax [Körperschaftsteuer]

In addition, you should also be aware of the regulation governing small entrepreneurs [Kleinunternehmerregelung], which contains a special provision with regard to the turnover tax obligation. More information can be found here.

Once you have acquainted yourself somewhat with the tax types and provisions cited, you should now also know which taxes apply to your tangible plan. This depends on

  • the size of your company,
  • the legal form for which you have opted, and
  • whether you are conducting a trade
  • or your activity is one of the liberal professions.

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