TT

Question 1

Analyze the PIT and MTL for this

1.
2.
3.
4.
5.
6.

Answer 1

• GmbH = corporation = business establishment by virtue of legal form => subject to trade tax
• deductions etc (eg §4b EStG)
• MTL: starting point taxable income from business operations
• additions/ deductions (if same like CIT (advanced, dividend), then no different treatment)
• = taxable trade income
• trade tax assessed *16%

Question 2

How to solve an exercise for CIT and TT when there are these:

1. selling machine (HC)
2. Permanent establishment with loss of 50000
3. advance payments for CIT 45k and TT 50k

And how do we proceed?

Answer 2

1. check 4 characteristics, and then SUBSTRACT the HD amount
2. loss PE included, no adjustments needed
3. §10 no 2 KStG and §4 Vb EStG both non deductible expenses (add both back in)
4. assess CIT with rate, reduce by prepayments
5. TT: start at taxable income from business operations; HD: no adjustments needed; Loss of PE is included -> ONLY FOR DOMESTIC operations these are subject to tax so we eliminate profit for TT purposes -> amount plus