If people open a craft business, a tax office or an online business, one thing is clear: The activity falls under one of the seven types of income under the Income Tax Act. Profits or surpluses are thus regularly subject to income tax. It is slightly less obvious with illegal business models, such as that of a dealer. In principle, there may also be a tax liability here if the requirements of income tax law are met.
Disclaimer: This article was written before a possible legalization of cannabis in Germany. Statements in connection with this plant may therefore be obsolete.
In Germany, apart from some grey areas, a clear distinction is made between legal activities on the one hand and illegal activities on the other. It does not matter on a regular basis whether a dealer discloses his activity to the authorities or – which is regularly the case – acts underground. In any case, the so-called trade becomes illegal only if it is punishable under the Penal Code (StGB) or a criminal law subsidiary law. This is the case, for example, in the following activities:
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.