Who has to pay corporation tax?

If the management or registered office is located in Germany, there is unlimited corporation tax liability:

• Corporations (e.g. GmbH, AG) as well as opting companies within the meaning of § 1a KStG
• Cooperatives
• Mutual insurance companies
• other legal entities under private law (e.g. associations, foundations)
• Associations without legal personality, institutions without legal capacity, foundations and other special-purpose assets under private law and
• Businesses of a commercial nature of legal entities under public law (e.g. economic activities of municipalities).

All income is subject to tax.

Companies with limited tax liability are those that have domestic income but in Germany

• have neither a management
• or a registered office in Germany.

Only domestic income is subject to tax.

Management is the place where the relevant corporate decisions are made. The registered office of the company is determined by the shareholders in the articles of association and entered in the commercial register.

Non-profit associations only have to pay corporation tax on income from their business operations if their income exceeds € 5,000.