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Germany - Other taxes and levies

Germany - Other taxes and levies

Taxation of international executives

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Social security tax

Are there social security/social insurance taxes in Germany? If so, what are the rates for employers and employees?

Employer and employee

The following rates have to be applied against the gross salary, with the ceilings indicated.

Type of Insurance Paid by employer Paid by employee Total
Pension 9.3% 9.3% 18.6%
Unemployment 1.25% 1.25% 2.5%
Health** 7.3% 7.3% 14.6%
Nursing* 1.525% 1.525% 3.05%
Total Percent 19.375% 19.375% 38.75%

 

  Annual** EUR (Ceiling) Monthly*** EUR (Ceiling)
Pension 80,400 6,700
Unemployment 80,400 6,700
Health 54,450 4,537.50
Nursing 54,450 4,537.50

* Plus 0.25 percent surcharge on nursing insurance to be borne by employees without children. Furthermore, special rates apply for Saxony (1.025 percent employer and 2.025 percent employee rate).

** An additional average amount of 0.9 percent – shared equally between employer and employee – is levied. However, this percentage might slightly vary – depending on the individual insurance agency`s discretion.

***The ceiling for pension and unemployment insurance applicable in the Eastern Bundeslaender (former German Democratic Republic) is EUR73,800 per year and EUR6,150 per month.

The employer is liable for the total payment, which must be made on a monthly basis. Exemption may be granted under the EU rules or a bilateral social security agreement.

GIFT, WEALTH, ESTATE, AND/OR INHERITANCE TAX

Are there any gift, wealth, estate, and/or inheritance taxes in Germany?

Inheritance and gift tax is assessed on the transfer of property by reason of death, gifts during lifetime, and transfers for certain specified purposes, as well as on the net worth of certain family foundations or trusts.

Worldwide assets are potentially liable to this tax if the transferor or the transferee is resident in Germany at the relevant time. Otherwise, it applies only to assets situated in Germany.

Taxable transfers of property are subject to inheritance and gift tax at graduated rates, depending on the value of the property and the family relationship of the respective individuals. The rates vary from 7 percent up to 50 percent.

Since 1997, there has been no net worth tax in Germany.

REAL ESTATE TAX

Are there real estate taxes in Germany?

Yes. However, the existing regulation has been declared as “unconstitutional” by Court. Currently, a real estate tax reform is underway.

SALES/VAT TAX

Are there sales and/or value-added taxes in Germany?

The standard VAT rate for supplies and goods of services is 19 percent. For certain goods and services, the VAT tax rate is 7 percent.

UNEMPLOYMENT TAX

Are there unemployment taxes in Germany?

Yes. The rate for unemployment tax is 2.5 percent (see above – social security taxes).

OTHER TAXES

Are there additional taxes in Germany that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, and so on.

Real estate transfer tax

This tax is generally imposed on any transaction that causes a change in the ownership of real estate property situated in Germany. The tax rate is generally 6 percent (ranging from 3.5 - to 6.5 percent, depending on the location).

Local taxes

Local taxes are levied only on income from trade or business.

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