Fine and good that the trade tax is relevant for companies within the meaning of § 15 EStG – But who actually pays the final tax amount to the municipality? With § 5 GewStG today let us take a look at the taxpayer of trade tax as well as some of the most relevant special cases. We also deal with the special treatment of co-entrepreneurships within the meaning of § 15 (1) sentence 1 number 2 EStG.

According to § 5 (1) sentence 1 GewStG, the debtor of trade tax is always the person on whom the commercial enterprise (§ 2 GewStG) is operated. Capital companies such as the GmbH are their own tax entities within the meaning of § 2 paragraph 2 GewStG and, accordingly, also tax debtors.

The special feature applies to partnerships that they are also liable for business tax pursuant to § 5 (1) sentence 3 GewStG. The transparency principle of § 15 (1) sentence 1 no. 2 sentence 1 EStG is breached in this respect.

The tax office determines on the basis of the tax profit from business operations (§ 15 EStG) the trade tax income within the meaning of §§ 7 to 9 GewStG. It now applies the measurement figure of 3.5% (§ 11 paragraph 2 GewStG) and sends the measurement amount notices accordingly to the municipalities.

The municipality now applies its individual lifting set (average 400% in Germany) to the measured amount. On average, this results in a business tax burden of about 14 %.

For sole proprietorships and corporations, it is clear from the outset who is liable for business tax – namely the natural or legal person himself. It receives the corresponding measurement notice, which is followed by the actual tax notice of the municipality. The measurement decision of the tax administration is binding for the trade tax decision in the sense of § 171 paragraph 10 sentence 1 AO and § 182 paragraph 1 AO.

Conversely, the change in the tissue control measuring decision, for example after an objection, also leads to a change in the trade tax decision itself. This is governed by § 175 (1) sentence 1 number 1 AO.

Within the profit determination there is an operating expense within the meaning of § 4 (4) EStG. However, this is considered non-deductible, so that an addition outside the profit determination must take place (§ 4 paragraph 5b EStG). Individual entrepreneurs may have the trade tax paid charged to the income tax up to a levy of 400 % (§ 35 (1) sentence 1 no. 1 EStG). The shareholders of a corporation are denied this option.

Deviating from the otherwise applicable transparency principle, the co-entrepreneurship itself is liable for business tax. The tax office itself therefore sends the measurement certificate and tax certificate to the respective authorised representative whom the partnership has determined. If necessary, it may also be sent to the business address of the co-entrepreneurship (§ 183 (1) AO).

Even at the level of the partnership, business tax payments according to § 4 paragraph 5b EStG are not deductible operating expenses.

However, the individual co-entrepreneurs can have their business tax credited to income tax. In this respect, § 35 (1) sentence 1 number 2 EStG applies an identical provision as for commercial individual enterprises. The tax office regularly combines the determination of the profit and loss shares with the pro rata business tax determination (§§ 179 paragraph 2 and 180 paragraph 1 no. 2 letter a AO).

In the case of an atypical silent partnership, the owner of the commercial transaction (§ 230 paragraph 1 HGB) remains liable for business tax. He receives the tax notice and has to pay the tax in full; the internal relationship between the owner and the silent partner is in this respect irrelevant (R 5.1 paragraph 2 sentences 1 to 3 GewStR).

Operational transfers take place regularly at the beginning of the year for reasons of simplification, but a sale is also possible during the year. The legislator has recognized the trade tax problem and with § 5 paragraph 2 GewStG created its own provision for business transfers. Accordingly, the transferee of the business becomes liable for business tax when the business is transferred as a whole.

If only a partial operation is transferred (§ 16 (1) sentence 1 number 1 sentence 1 Alternative 2 EStG), the purchaser sometimes establishes an independent tax entity within the meaning of § 2 (1) GewStG. In addition, nothing usually changes for the vendor.

In the cases of § 5 paragraph 2 GewStG, the transferee becomes taxpayer of business tax at the time of transfer of benefits and burdens. Relevant are notarial or contractual agreements.

For any existing residual tax liabilities, the acquirer is liable in accordance with § 75 (1) sentence 1 and 2 AO up to the amount of the acquired assets. A claim is regularly possible by liability notice according to § 191 (1) sentence 1 Alternative 1 AO. This decision – like administrative acts within the meaning of § 118 sentence 1 AO in general – must be justified (§ 121 paragraph 1 AO) and must be issued in writing (§ 191 paragraph 1 sentence 3 AO).