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Trade tax, Part III: Trade tax return

Trade tax return

Deduct trade tax from income tax

Trade tax cannot be deducted from tax as a business expense, as it is a non-deductible business expense. This is a financial disadvantage for your company. To compensate for this disadvantage, there is the option of offsetting trade tax against income tax. As a result, you can reduce your income tax by a maximum amount of 400 percent of the trade tax.

To calculate this amount, you can use the following formula:

Reduced income tax = income tax – tax assessment amount x 3.8

We looked at how to calculate your full trade tax in Part II.

Submitting the trade tax return

If your company is subject to trade tax, it is also your responsibility to submit a trade tax return. This includes the profits of your commercial activity including all additions, deductions, trade income, trade losses and information on the loss assessment. The tax office uses this information to determine the full amount that you and your company have to pay. If you run several commercial enterprises, you must submit a separate trade tax return to the tax office for each one.

Digitale Gründung is happy to support you with your start-up process and all tax law issues. We offer coaching sessions for this purpose.


In this article, you will find out how to deduct trade tax from your income tax and submit the appropriate trade tax return.

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