Trade tax (Gewerbesteuer) is based on federal law but is levied
by local municipalities on a corporation’s “trade income” (Gewer-
The trade income is multiplied by a basic tax rate (Steuer-
messzahl) of 3.5% to arrive at the so-called base amount
Range of trade tax rates
Location of business
Multiplier Trade tax rate
Conurbation 400% 14.00%
The relevant multiplier (Hebesatz) for each local municipality
is then applied to the base amount.
These multipliers typically
range between 300 – 490%, i.e. A factor of 3.0 to 4.9, yielding
a tax rate of 10.5 – 17.15%. In order to eliminate so-called trade
tax havens, municipalities must set their multipliers at or above
The typical multiplier for conurbations is approx. 400%;
in adjoining areas it can be as low as 200%.