Information on trade tax
The taxable object of trade tax is the commercial enterprise with its objective earning power. A business is defined as a commercial enterprise within the meaning of income tax law. Activities that are to be regarded as the exercise of agriculture and forestry or a liberal profession are not subject to trade tax.
Basis of trade tax
The company's trade income forms the basis for taxation. This is the profit from business operations declared by the taxpayer in accordance with the provisions of the Income Tax Act or the Corporation Tax Act, which is increased and reduced by certain amounts. From the 2008 assessment period onwards, trade tax is no longer deductible from taxable profit as a business expense.
However, sole traders and partnerships are entitled to a reduction in income tax pursuant to Section 35 of the Income Tax Act as a result of the application of trade tax.
Amount of trade tax
The calculation of trade tax is based on a taxable base. This is determined by multiplying the business income by a tax rate (3.5%). If a company has business premises in multiple municipalities, the tax office allocates the taxable base among them.
The municipality assesses and collects trade tax based on the tax base or the allocated share, using a percentage rate (assessment rate).
The assessment rate for the City of Mainz starting in 2025 is 460 points. It is set by the City Council.
Responsibilities
Your tax office is responsible for determining the assessment amount. If the calculation of the assessment amount is incorrect, please contact your local tax authority.
The municipality calculates the trade tax based on the assessed amount and the assessment rate and then levies it.