Corporate Income Tax for GmbH and UG in Germany 2026: Rate, Calculation and Deadlines

Corporate income tax (Körperschaftsteuer) is one of the central taxes for GmbH and UG companies in Germany. Unlike sole traders or partnerships, corporations are taxed at the entity level on their profits. This guide explains the 2026 tax rate, how to calculate your liability, and the deadlines you must not miss.

In short: Corporate income tax is a flat 15% of taxable income in 2026, plus a 5.5% solidarity surcharge, giving an effective rate of 15.825%. A GmbH or UG has no tax-free allowance: tax applies from the first euro of profit. Combined with trade tax, the total burden is typically 28–32%. From 2028, the corporate tax rate falls in five annual steps from 15% to 10% (2032). Returns are filed annually via ELSTER, and prepayments are due on 10 March, June, September and December.

What is Körperschaftsteuer?

Körperschaftsteuer is Germany's corporate income tax, levied on the profits of legal entities: primarily GmbH, UG (haftungsbeschränkt), and AGs. It is governed by the Körperschaftsteuergesetz (KStG) and functions similarly to income tax for individuals, but applies at the company level.

The key difference from a sole proprietorship is that German tax law strictly separates the company level from the shareholder level. Profit is first taxed at the company level with corporate income tax and trade tax. Only when the company distributes the remaining profit does the shareholder pay additional capital gains tax (Kapitalertragsteuer). If the profit stays in the company (retention), taxation stops for now at the company level.

Who is Subject to Corporate Tax?

All companies incorporated or managed in Germany are subject to unlimited corporate tax liability, including:

• GmbH (Gesellschaft mit beschränkter Haftung, limited liability company)
• UG (haftungsbeschränkt), the "mini-GmbH" with lower minimum capital
• AG (Aktiengesellschaft, public limited company)
• Registered cooperatives (eG)

Partnerships (GbR, OHG, KG) are not subject to Körperschaftsteuer: their profits flow through directly to the partners and are taxed at the individual level. It is precisely this transparency principle that the corporation lacks, which is why corporate income tax is the central profit tax here.

Corporate Tax Rate 2026: 15% Plus Solidarity Surcharge

The corporate income tax rate is a flat 15% of taxable income, applied uniformly across all of Germany. There is no progressive tariff: whether the profit is €10,000 or €10M, the rate stays the same. On top of this, a 5.5% solidarity surcharge (Solidaritätszuschlag) is levied on the tax itself, bringing the effective corporate tax burden to 15.825%.

Combined with Gewerbesteuer (trade tax, roughly 14–17% depending on the municipality), the total tax burden on GmbH profits is typically 28–32%. The same applies to UGs. For more on the surcharge, see solidarity surcharge for the GmbH.

Corporate Tax Falls from 2028: 15% Down to 10%

The Immediate Investment Programme Act (Gesetz für ein steuerliches Investitionssofortprogramm), passed in July 2025, already anchors a gradual reduction of the corporate tax rate in law (§ 23 (1) KStG). For 2026 and 2027 the rate stays at 15%. From 2028 it drops by one percentage point per year until it reaches 10% in 2032:

Once fully implemented, the total burden on a corporation from corporate tax, surcharge and trade tax falls from just under 30% today to around 25%. For profit retained in the company, a GmbH becomes more attractive year by year from 2028.

How to Calculate Corporate Income Tax

The starting point is the commercial profit (Jahresüberschuss) from the income statement (GuV). Tax adjustments are then applied to arrive at taxable income:

• Add back: non-deductible expenses (for example fines, half of supervisory board fees, part of entertainment costs), hidden profit distributions, and trade tax itself (non-deductible since 2008)
• Deduct: tax-exempt income (such as dividends under § 8b KStG) and loss carryforwards from prior years

The 15% corporate tax and the 5.5% solidarity surcharge are then applied to the resulting taxable income. A worked example:

Corporate Tax and Trade Tax: the Total Burden

Corporate income tax is only one of two profit taxes. Every GmbH and UG also pays trade tax (Gewerbesteuer), calculated as trade income × base rate 3.5% × the municipal multiplier (Hebesatz). The multiplier ranges from 200% (the legal minimum) to over 500% in large cities. At a multiplier of 400%, trade tax works out to roughly 14% of profit.

These figures are rounded; the exact amount depends on your municipality's multiplier. More on this: how to calculate trade tax in 2026.

No Allowance, but Loss Carryforwards

Unlike certain associations and cooperatives (which get a €5,000 allowance), a GmbH or UG in commercial business has no tax-free allowance. Corporate tax applies from the first euro of profit.

If the company posts a loss in a given year, that loss is not wasted. It can be carried forward and offset against profits in later years. Note the minimum taxation rule: offsetting is unlimited up to a base amount of €1M, and above that only up to 60% of the excess income. This spreads the tax burden over several years. Details: using a GmbH loss carryforward.

Avoiding Hidden Profit Distributions

A common point of dispute with the tax office is the hidden profit distribution (verdeckte Gewinnausschüttung, vGA). It arises when the company grants a shareholder a benefit it would not have granted an unrelated third party, for example an excessive managing-director salary, an interest-free loan, or private use of company assets.

The consequence: the amount is added back to taxable income and increases corporate tax. That is why a shareholder-managing-director's salary should always be at market level and agreed in advance. What counts as reasonable is covered in managing-director salary in the GmbH.

Quarterly Prepayments: Due Dates 2026

Corporate income tax is collected through quarterly advance payments. The due dates for 2026 are:

Prepayments are based on the most recently assessed tax. After the financial year ends, the prepayments made are offset against the final tax liability. If you expect significantly lower profits in 2026, you can apply to reduce them; if profits rise sharply, an increase is worth requesting to avoid a large back payment. See our guide on estimated tax payments in Germany.

Filing the Corporate Tax Return via ELSTER

The annual corporate tax return must be filed electronically via ELSTER, the central form being the Anlage KSt 1 A together with the electronic balance sheet (E-Bilanz). The standard deadline for tax year 2025 is 31 July 2026. If you use a tax advisor, the extended deadline is 28 February 2027.

Norman helps GmbH and UG founders keep their bookkeeping current and submit the corporate tax return directly via ELSTER, fully digital, no tax advisor needed. For how the full GmbH return is structured, see the GmbH tax return 2026.

Frequently Asked Questions

How high is corporate income tax in 2026? The rate is a flat 15% of taxable income plus a 5.5% solidarity surcharge, giving 15.825%. From 2028 it falls in steps to 10% by 2032.

Is there a tax-free allowance for corporate tax? Not for a GmbH or UG in commercial business. Tax applies from the first euro of profit. A €5,000 allowance only applies to certain associations and corporations.

Does a UG pay the same corporate tax as a GmbH? Yes. The UG (haftungsbeschränkt) is legally a GmbH and is subject to the same 15% rate plus surcharge. In addition, the UG must set aside 25% of its annual profit into a statutory reserve until the €25,000 share capital is reached.

When is corporate tax due? As quarterly prepayments on 10 March, 10 June, 10 September and 10 December. The final payment is due after the tax assessment notice.

Is corporate tax a deductible business expense? No. Like trade tax, corporate income tax is not deductible and does not reduce taxable income.

Key Takeaways

Germany's 15% corporate income tax is a fixed cost for every GmbH and UG. Staying on top of quarterly prepayments, knowing your filing deadlines, avoiding hidden profit distributions, and keeping clean books are the pillars of stress-free corporate tax compliance. From 2028, the gradual cut to 10% adds further relief, which is a good reason to get your bookkeeping clean and digital today.

Further reading: profit distribution in the GmbH | GmbH bookkeeping 2026.