Trade tax in Germany reaches historic high

The trade tax burden for companies in Germany has never been higher than this year. This is shown by an evaluation by the German Chamber of Commerce and Industry (DIHK), which is available to WELT AM SONNTAG. Of the 706 cities and municipalities examined with more than 20,000 inhabitants, 88 increased the assessment rate and only five lowered it.

The development has accelerated again compared to the previous year. In 2025, 64 municipalities raised the rate and four lowered it. The national average rose by two points to 441 points. “This means that trade tax is developing into a silent brake on locations,” says DIHK Managing Director Helena Melnikov. Germany is already one of the high-tax countries.

Further increases in the assessment rate would exacerbate the competitive disadvantage and would deprive companies of funds for urgently needed investments. For every municipality that lowers its trade tax, there will be almost 18 that increase it this year.

Many municipalities are in a dilemma. If you increase the assessment rate, tax revenue can be stabilized in the short term. However, higher trade taxes do not mean that the location becomes more attractive, more companies settle and additional funds flow into the city treasury.

Conversely, less cash-strapped municipalities may even be able to lower the assessment rate. This increases the chance that more companies will settle there. The regional differences in Germany are huge. This year, the assessment rates range from 250 percent in Monheim am Rhein and Leverkusen to 580 percent in Oberhausen and Mülheim an der Ruhr. The range is 330 lifting rate points.

New rules for apportioning taxes

It remains to be seen to what extent this will be reduced next year when the prescribed minimum assessment rate increases from 200 percent to 280 percent. Since only three cities with more than 20,000 inhabitants in Brandenburg, including Zossen, are currently below the new threshold, the overall situation will hardly change.

Melnikov calls for better financial resources for cities and municipalities. "The federal and state governments must equip the municipalities with appropriate and long-term tasks. New tasks may only be transferred with secured financing," she says. At the same time, existing tasks needed to be put to the test.

The agreement between the federal, state and local authorities to apply the motto “Whoever orders, pays” more closely to new tasks from October is a step in the right direction. “The structural problems with existing tasks and their financing have not been solved,” Melnikov continued.

The top ten municipalities with the highest values ​​are made up exclusively of municipalities in North Rhine-Westphalia. The most populous federal state once again has the highest trade tax burden with a population-weighted average of 476 percent - an increase of two points compared to the previous year.

Of the 214 municipalities in the country examined, 40 increased their assessment rate this year. The strongest increase was in Saxony-Anhalt. The average value there climbed by five points from 422 to 427 percent. Hessen follows with four points and Baden-Württemberg with three points. Brandenburg has the lowest assessment rate at 387 percent.

The burden on companies is determined by the formula for the assessment rate times the uniform tax figure of 3.5 percent: In North Rhine-Westphalia, an average of 16.6 percent of commercial income is paid as taxes. In combination with the corporation tax of 15 percent, this results in a total burden for corporations of almost 32 percent; in Brandenburg it is 28.5 percent. According to the OECD, on average in industrialized countries the burden on companies is almost 24 percent.