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How is corporate income tax determined?

Corporate income tax is levied by the tax office on the income of legal entities. What is considered income and how it is to be determined is determined in accordance with the provisions of the Corporate Income Tax Act and the Income Tax Act.

Corporation tax is an annual tax and amounts to 15 per cent of the taxable income of a calendar year. The tax office levies an additional 5.5 per cent solidarity surcharge on the calculated tax liability.

The tax office determines the amount of tax. You will then receive a notice with a request for payment or information on a credit payment.

Corporate income tax is a joint tax. The revenue accrues jointly to the federal government and the states.


The corporation itself must pay tax on the profit it generates. At the same time, it can distribute this profit to its shareholders. In the case of the shareholders, the profit distribution is subject to income tax.

In order to reduce double taxation, distributions are only taxed at a rate of 25 percent for the shareholder (final withholding tax). Alternatively, as a shareholder you can apply in your income tax return for 60 percent of the distribution to be taxed at your personal income tax rate instead (partial income method).


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