Germany
Top Income Tax
45%
Marginal rate
Corporate Tax
30%
Standard rate
VAT / Sales Tax
19%
Standard rate
Capital Gains
26.375%
Standard rate
Overview
Germany has Europe's largest economy with a complex but comprehensive tax system. High personal and corporate tax rates are offset by excellent infrastructure and social services. Berlin has emerged as a major startup hub with a growing tech ecosystem.
Income Tax Brackets
| Income Range (EUR) | Tax Rate |
|---|---|
| 0 - 11,604 | 0% |
| 11,604 - 17,005 | 14% |
| 17,005 - 66,760 | 24% |
| 66,760 - 277,825 | 42% |
| 277,825+ | 45% |
Progressive formula between brackets. Plus solidarity surcharge of 5.5% on tax amount (only for high earners).
Corporate Tax
Standard Rate
30%
15% corporate tax + 5.5% solidarity surcharge + ~14% trade tax = ~30% effective.
VAT / Sales Tax
Standard Rate
19%
Reduced Rates
7%
7% reduced rate on food, books, newspapers, public transport.
Capital Gains Tax
Standard Rate
26.375%
26.375% flat rate (25% + solidarity surcharge). Abgeltungssteuer system.
Social Security Contributions
Employee
20.3%
Employer
20.8%
Self-Employed
40%
Covers health, pension, unemployment, long-term care. Self-employed pay full amount.
Pros & Cons
Pros
- Strong economy and business infrastructure
- Extensive tax treaty network
- Excellent social services
- Berlin startup ecosystem
Cons
- High overall tax burden (~30% corporate)
- Complex bureaucracy
- No digital nomad visa
- High social security contributions
Living Indicators
Cost of Living Index
Above average
Quality of Life Index
Good
Best For
Data Sources
Tax rate data for Germany is compiled from the following authoritative sources:
- OECD Tax Database
- Tax Foundation International Tax Competitiveness Index
- World Bank Business Enabling Environment
- Germany government tax authority publications
- PwC Worldwide Tax Summaries
Last verified: 2024-01
Disclaimer: This content is for informational purposes only and does not constitute tax advice. Tax laws change frequently. Always consult a qualified tax professional before making decisions about your tax residency or obligations.