BDI Fact Check | Mittelstand & Family Businesses The German Mittelstand
Taxes
Is the German tax environment SME-friendly?
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Germany has become a high-tax country in terms of corporate taxation. As other countries (France, UK, USA) lower their tax rates, Germany loses ground. This is also shown by the Country Index for Family Businesses 2021: In the category “Taxes”, Germany ranks 20th out of 21 countries - an unacceptable trend.
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The bureaucracy in the highly complex German tax system – key words are long retention periods and time-consuming tax audits – shows enormous potential for simplification. Especially small and medium-sized companies with limited resources would benefit from this.
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In addition to corporate taxes, family businesses are burdened by inheritance tax and exit taxation.
Germany’s ranking in the category “Taxes” in the Country Index for Family Businesses (Competitiveness ranking) Source: ZEW Mannheim (2021)
Rank 1 Drivers of the downward trend Passive German tax policy with regard to: Tax burden of national business activity Tax burden of inheritance tax Tax burden of cross-border business activity Bureaucratic burden / complexity of the tax system
Competitiveness of the fiscal framework
.. .. Rank 11
Rank 12
Rank 13 Rank 16
Rank 20 Rank 21 2006
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