If a corporation (in particular corporations such as the GmbH) has its registered office or management in Germany, it is subject to unlimited corporate tax. If, on the other hand, none of these conditions exist, there may be a limited corporate tax liability according to § 2 Corporate Tax Act (KStG). “Limited” because it concerns only the domestic income of the respective corporation.
Corporate income tax is one of the income taxes and is comparable to income tax in many places. In particular, a corporation also determines its income in accordance with the principles of the Income Tax Act (§ 8 (1) sentence 1 KStG) and is obliged to keep accounts in accordance with § 4 (1) sentence 1 EStG.
Consequently, the corporate tax law with § 2 no. 1 KStG knows not only the unlimited but also the limited corporate tax liability. The criteria for the provision are:
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.