tax treatment of the profits derived

For the tax treatment of the profits derived from a domestic
corporation by a foreign investor, it is necessary to distinguish
between the level of the corporation and the level of the share-
holders.

The corporation itself is an independent taxable entity and hence
subject to corporate income tax on its entire worldwide income
(resident tax liability). A uniform corporate income tax rate
applies whether profts are retained or distributed. The corporate
income tax rate is 15%. Apart from corporate income tax, Ger-
man businesses are generally subject to trade tax
and the solidarity surcharge (5.5% of
corporate income tax).