Study: tax burden relatively high for german smes

Study: Tax burden relatively high for German SMEs

The total tax rate as a percentage of profits rose from 46.8 percent to 49.4 percent, reported the consulting firm pricewaterhousecoopers (pwc) in frankfurt, presenting an analysis prepared jointly with the world bank. Worldwide, however, the total tax rate has fallen from 44.7 percent to 43.1 percent.

In the global tax rankings, germany has fallen from 72nd to 89th place. However, this development is exclusively attributable to the abolition of declining balance depreciation for economic assets. "The study results make it clear that even a supposedly small change in tax law can have significant consequences for the tax burden," said pwc corporate tax expert tobias taetzner. A higher total tax rate is directly detrimental to the international competitiveness of small and medium-sized enterprises.

In any case, german smes are subject to a relatively high tax burden compared with other european countries. Only in seven european countries is the rate higher than in this country – including spain (58.6 percent), france (64.7) and italy (65.8).

According to the data, the "total tax rate" is lowest in croatia (19.8 percent), luxembourg (20.7 percent) and cyprus (22.5 percent). Even countries that are not generally considered low-tax countries impose a much lower burden on medium-sized companies than germany, pwc emphasized: in denmark, for example, the rate is 27 percent, while in norway, companies had to pay an average of 40.7 percent of their corporate profits to the state. Taetzner emphasized: "the comparison of tax systems shows serious differences even between neighboring countries with similar economic and political framework conditions."