According to § 8 GewStG, certain operating expenses are added back to the profit from commercial operations, provided they have previously reduced the profit. This applies according to § 8 no. 1 letter a GewStG for example for interest and other fees for debts. However, if the company is a bank within the meaning of the KWG, the so-called banking privilege applies. It leads to the fact that fees for debts are only proportionally added if certain conditions are met. The banking privilege is regulated in § 19 GewStDV.
First principle: Adding fees for debts to business tax
Basis of assessment of trade tax is in principle the profit from business operations, which was determined according to §§ 4 and 5 EStG (§ 7 GewStG). For the purposes of trade tax, however, various additions and invoices are to be made, so that the tax base of the trade tax can ultimately differ from the income tax or corporate tax base.
According to § 8 no. 1 letter a GewStG, fees for debts, i.e. interest and payments comparable to them, are to be added. “Debt” is any type of debt a company raises, primarily loans from banks and shareholders. The addition shall be made to the extent that the sum of the interest exceeds EUR 200,000.
Example: A-GmbH paid EUR 500,000 in interest in 2024. Of this, EUR 300,000 exceeds the limit of EUR 200,000. Thus, 25% of EUR 300,000, i.e. EUR 75,000, are to be added according to § 8 No. 1 GewStG.
With the addition, the legislator wants to achieve that the remuneration for the debt capital available to the company and the profit-reducing expense, which is economically comparable with the remuneration for debt capital, are recognised to a limited extent as income of the company forming the subject of taxation.
2nd exception: banking privilege according to § 19 GewStDV
Banks and other credit institutions finance their investments largely with debt capital, which they borrow from the European Central Bank (ECB), among others (BFH of 06.12.2016, I R 79/15). They are thus more or less “passage points” for capital, which they subsequently make available to corporate and private customers.
If § 8 no. 1 letter a GewStG were also to be applied to banks according to its wording, there would be an overload of credit institutions unwanted by the legislature. Therefore, the legislature introduced the so-called banking privilege via § 35c paragraph 1 no. 2 letter f GewStG in conjunction with § 19 GewStDV.
2.1 Beneficiary enterprises
As the name suggests, the so-called banking privilege only favors banks and institutions comparable to them. Specifically, the following institutions are covered by § 19 GewStDV:
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.