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Is the German tax environment SME-friendly?
.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.
.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.
.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
Competitiveness of the fiscal framework
Rank 11 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
