Trade tax

Trade tax has been levied uniformly in Germany since 1936. It is justified by the fact that the presence of a commercial enterprise imposes burdens on the city. For example, access roads have to be built, the volume of traffic increases, air and water are polluted and noise pollution occurs.

Trade tax is the city's most important original source of income and is used to fulfil municipal tasks. In principle, the city is entitled to the tax revenue; however, the federal and state governments are involved in this through the trade tax levy to be paid by the municipality. To compensate for this, the city receives a share of the income and sales tax.

Alongside property tax, trade tax is one of the so-called real or property taxes. In the case of trade tax, the commercial enterprise and its objective earning power are taxed.

Every commercial enterprise that maintains a permanent establishment in the city is subject to trade tax. The definition of a commercial enterprise is contained in the Income Tax Act. Agricultural and forestry businesses and so-called liberal professions are not deemed to be commercial enterprises.

Taxation procedure
The business income of the company forms the basis for taxation.
This is the profit from the business declared by the taxpayer in accordance with the provisions of the Income Tax Act or the Corporation Tax Act, which is increased and reduced by certain amounts.
The assessment and collection procedure consists of two stages.

1. the tax office determines the basis for taxation (trade income and trade tax assessment amount) on the basis of the annual trade tax return to be submitted and forwards this to the city. The trade tax assessment amount transmitted by the tax office is binding for the city. If a commercial enterprise has business premises in different municipalities, the trade tax assessment amount must be distributed (apportioned) to the municipalities involved. The apportionment percentage determined for Beckum is communicated to the city in writing and is binding for the assessment of trade tax. With the basic assessment notices, the tax offices simultaneously decide on the tax liability of the companies and the city's right to levy tax.

2. The city applies the trade tax assessment rate valid for the respective collection period to the measurement amounts transmitted by the tax offices. The trade tax calculated in this way is determined with the trade tax assessment notice. The basic assessment notices are issued by the tax office.
The trade tax assessment notices are sent out by the town of Beckum.

Example for the calculation of trade tax:
Trade tax base amount 2024 x assessment rate = trade tax
EUR 11,250.00 x 435 per cent (v. H.) = EUR 48,937.50

Current trade tax assessment rate of the city of Beckum 2024

• 435 v.H.

Appeals against decisions made by the tax offices in basic assessments can only be lodged with the tax office. To avoid discrepancies, the taxpayer should inform the City of Beckum of the measures taken.

Advance payments
Advance payments for the anticipated trade tax are generally due on 15 February, 15 May, 15 August and 15 November of the current calendar year. Each advance payment usually amounts to a quarter of the trade tax resulting from the last, most recent assessment.

Interest
If the assessment of trade tax results in an additional tax claim or refund, interest must be paid on this. This does not apply to the assessment of advance payments.
The interest period begins 15 months after the end of the calendar year in which the tax arose. It ends when the additional tax claim or refund takes effect. The interest rate is 0.15 per cent per month.

Payment dates
The payment dates can be found in the trade tax and interest assessment notices. It is advisable to issue the City of Beckum with a direct debit authorisation.

Local law

• Statutes of the City of Beckum on the Determination of Real Tax Rates (Hebesatzsatzung) as amended from time to time.
• Budget Statutes of the City of Beckum in the respective valid version

Legal bases in general

• Trade Tax Act (GewStG)
• Fiscal Code (AO)