and Legal Situation

The German fiscal system is complex – you won't get your income tax statement on a napkin, but tax accountants and lawyers take care of every aspect of a company's tax and legal affairs.

Sejo, as your partner, takes care of them.

As a company you will need to be supported by your own accounts department to process taxes, wages and your regular balance sheets together with profit and loss statements. Some of these processes can be outsourced but as an owner of a company you must always know what's going on, because you are the one responsible. Different kinds of corporate forms have their own special requirements and rules about handling accounting affairs, and these rules are very strict and highly complex. Offences committed against them lead to harsh penalties, independent of whether or not they were intentional.

A German company typically sends its accounting documents monthly to the relevant tax office, not least because wages and business taxes are organised by different tax offices, with the payment usually made in advance. It's up to the tax office to decide on your future estimated turnover, so it's always a little bit of a fight, but with complete and clear documents, sent in within the correct timescale, and with a well-established communication channel between your company and the officials, everything gets to be routine and is easily projectable.

Actually, German law was founded based on the ancient Roman law with its background of 2000 years. In contrast to the Anglo-American law (which is Common Law and based on medieval British history), fundamental to German jurisdiction are the German Basic Law (Grundgesetz / GG) and the German Civil Code (Buergerliches Gesetzbuch / BGB). The Commercia lCode (Handelsgesetzbuch / HGB) is appropriate for business affairs and in the case of a crime there is a criminal code (Strafgesetzbuch / StGB).

The German law – two millennia of law history

The big difference is that Anglo-American law focuses on the norms of German law with the judge only having to interpret the written law. Precedents don't have a law-giving impact, and the judge is the only person responsible for the judgment. Jurors are not part of the German justice system, and judges are lawyers with excellent university grades who are now employed by the government.

The German law and tax system is efficient and reasonable, and you will find no corruption. With proper assistance on your side, you can develop your business in Germany in a successful, relaxed and secure manner.

German taxes (excerpt):

Lohnsteuer / Einkommensteuer
wage tax / income tax
Umsatzsteuer / Mehrwertsteuer
value-added tax (VAT)
corporate income tax
flat rate withholding tax
turnover tax on imports (importation VAT)
business tax
real estate tax
real estate transfer tax
net worth tax

Sejo is your top partner for your individual demands in Germany. We are gladly looking forward to support you. Let's get in touch!

Contact Us

Stephan Goebel
Solmserstr. 26
35578 Wetzlar
Dr. Stephan Goebel

Fax: + 49 (321) 211 833 67