Corporation tax is a particular form of income tax. It is paid by corporations, legal persons and estates. In particular, limited companies, cooperatives, other entities governed by private law, as well as unincorporated associations, institutions, foundations etc. are liable for taxation. In this context, it is necessary to distinguish between the unlimited and limited liability for corporation tax. Under certain circumstances, it is also possible to be exempt from the obligation to pay tax.
Corporation tax is a community tax, which means that the amounts paid are collectively due to the federal government and the states. The legal basis for corporation tax is the Corporation Tax Act (KStG). The extent of the corporation tax to be paid is calculated among other things according to the taxable income of the corporation concerned. Corporation tax thus ultimately amounts to a tax on income, that is to say the basis for the calculation of taxation is the income or profit which the corporation has generated in the tax assessment period (in this context, this is a calendar year).
Corporation tax law is complex matter and for a layman often not to be overlooked. It is advisable to obtain advice at an early stage from a lawyer versed in the field of tax law.