Contents

1.2.4 Local taxes

1.1 General considerations regarding taxes and fees

A tax (from the Latin taxo; "rate") is a financial charge or other levy imposed upon a taxpayer (an
individual or legal entity) by a state or the functional equivalent of a state to fund various public
expenditures. A failure to pay, or evasion of or resistance to taxation, is usually punishable by law.
Taxes are also imposed by many administrative divisions. Taxes consist of direct or indirect taxes
and may be paid in money or as its labor equivalent. Few countries impose no taxation at all, such as
the United Arab Emirates.
Money provided by taxation has been used by states and their functional equivalents throughout
history to carry out many functions. Some of these include expenditures on war, the enforcement of
law and

public order, protection of property, economic infrastructure (roads, legal tender,

enforcement of contracts, etc.), public works, social engineering, subsidies, and the operation of
government itself. A portion of taxes also go to pay off the state's debt and the interest this debt
accumulates. Governments also use taxes to fund welfare and public services. These services can
include education systems, health care systems, pensions for the elderly, unemployment benefits,
and public transportation. Energy, water and waste management systems are also common public
utilities. Colonial and modernizing states have also used cash taxes to draw or force reluctant
subsistence producers into cash economies.
Governments use different kinds of taxes and vary the tax rates. This is done to distribute the tax
burden among individuals or classes of the population involved in taxable activities, such as
business, or to redistribute resources between individuals or classes in the population. Historically,
the nobility were supported by taxes on the poor; modern social security systems are intended to
support the poor, the disabled, or the retired by taxes on those who are still working. In addition,
taxes are applied to

fund foreign aid and military ventures, to influence the macroeconomic

performance of the economy (the government's strategy for doing this is called its fiscal policy; see
also tax exemption), or to modify

patterns of consumption or

within an economy, by making some classes of transaction

employment more or less attractive.

A nation's tax system is often a reflection of its communal values and the values of those in current
political power. To create a system of taxation, a nation must make choices regarding the distribution
of the tax burden who will pay taxes and how much they will pay and how the taxes collected will
be spent. In democratic nations where the public elects those in charge of establishing the tax system,
these choices reflect the type of community that the public wishes to create. In countries where the
public does not have a significant amount of influence over the system of taxation, that system may
be more of a reflection on the values of those in power.
Taxes in Germany
The principal taxes applicable to companies in Germany are corporate income tax, municipal trade
tax and value added tax (VAT). In addition to the normal corporate income tax, a surcharge of
corporate
ation. Other taxes include the municipal real estate
tax, real estate transfer tax, and customs and
excise duties. Employers have to bear a portion of the social security contributions. Germany has
implemented the EU parent-subsidiary, interest and royalties, and merger directives, as well as the
EU savings directive, the latter of which requires the

exchange of information between tax

administrations when interest payments are made in one EU member state to an individual resident
in another member state. Tax laws are enacted by the lower house (Bundestag) of the German
parliament. Federal laws relating to taxes require the consent of the upper house (Bundesrat) if the
revenue accrues wholly or in part to the states or municipalities. The states have power to legislate
with regard to local taxes on consumption and expenditure to the extent

such taxes are not

substantially similar to taxes regulated by federal law. They are empowered to determine the rate of
the tax on the acquisition of real estate.
The tax authorities may be authorized by a law to
issue statutory instruments. The Federal Ministry of Finance and the local upper tax authorities can
issue administrative decrees for guidance on certain aspects of the tax laws. The tax authorities at the
federal and state levels are in general responsible for collecting tax and enforcing the tax law. The
tax authorities are organized as federal, state and local departments, with different competencies
depending on the tax involved and the taxpayer concerned. In particular, the local authorities are
competent for the collection of taxes based on the residence of a taxpayer or the legal seat of an
entity. At federal level, the Federal Central Tax Office is competent for the administration of various
aspects of tax cases with international reference, e.g. credit of or

exemption from withholding taxes, the

collection of information and international administrative

assistance.

1.2 Presentation of direct taxes

A direct tax is generally a tax paid directly to the government by the person on whom it is imposed. In
a general sense, a direct tax is one imposed upon an individual person (juristic or natural) or
property (i.e. real and personal property, livestock, crops, wages, etc.) as distinct from a tax imposed
upon a transaction. In this sense, indirect taxes such as a sales tax or a value added tax (VAT) are
imposed only if and when a taxable transaction occurs. People have the freedom to engage in or
refrain from such transactions; whereas a direct tax (in the general sense) is imposed upon a person,
typically in an unconditional manner, such as a poll-tax or head-tax, which is imposed on the basis
of the person's very life or existence, or a property tax which is imposed upon the owner by virtue of
ownership, rather than commercial use.

Corporate tax or company tax refers to a tax imposed on entities that are taxed at the entity level in a
particular jurisdiction. Such taxes may include income or other taxes. The tax systems of most
countries impose an income tax at the entity level on certain type(s) of entities (company
or
corporation). Many systems additionally tax owners or members of those entities on dividends or
other distributions by the entity to the members. The tax generally is imposed on net taxable
income. Net

taxable income for corporate tax is generally financial statement income with

modifications, and may be defined in great detail within the system. The rate of tax varies by
jurisdiction. The tax may have an alternative base, such as assets, payroll, or income computed in an
alternative manner.

Taxable income and rates

The corporate tax rate is 15%, plus a 5.5% solidarity surcharge, which results in a combined rate of
15.825%. Trade tax, typically at rates between 14% and 17%, also is imposed. Resident corporations
are taxed on their worldwide income. However, tax treaties may exclude foreign-source income
from

German taxation. Nonresident companies are taxed on certain German-source income, such as
income
from a German permanent establishmen
t.

Taxable income defined

All income of a corporation generally is considered business income. There is no distinction between
capital gains and ordinary income. Taxable income of a corporation is computed on the basis of the
annual accounts prepared in accordance with German GAAP, subject to certain adjustments for book
-tax differences, tax-exempt and nondeductible items, and other corrections (e.g. constructive
distributions). For tax years beginning after 31 December 2012, corporations and other taxpayers
keeping accounts have to submit a standardized electronic version of their annual accounts including
a reconciliation of the book-tax differences or an electronic tax balance sheet and profit and loss
account (so-called e-balance sheet) with their (electronic) income tax return.

Deductions
In general, all expenses are deductible if they have been incurred as a result o business operations.
Certain expenses may be disallowed (e.g. expenses related to exempt income, income taxes and
interest paid to the government on late income tax payments) or may be deductible only up to a
limited amount.

Interest
Generally, the deduction of interest expense exceeding interest income (net interest expense) is
limited to 30% of the taxable earnings before net interest expense, tax, regular depreciation and
amortization (tax EBITDA). The limitation applies to all interest regardless of whether the debt
is owed to a
shareholder, related party or third party. Excess interest may be carried forward indefinitely. An
EBITDA carry forward is generated if the taxpayer has net interest expense that is lower than 30% of
the tax EBITDA. The excess EBITDA may be carried forward and used in the following five years
when the net interest expense exceeds 30% of the current EBITDA. The 30% limit does not apply
(with some related-party exceptions) where: (i) the annual net interest expense is less than EUR 3
mil

ii) the taxp

or (iii) the taxpayer demonstrates that the equity ratio of the German borrower does not fall short of
the equity ratio of the worldwide gro

equity ratio is determined based on the financial statements for the German business at the end of the
previous financial year. A uniform accounting standard must be used for the German business and
the

group financial statements (primarily

RS or, if no IFRS accounts are available, EU local

country

IF GAAP or US GAAP as a last resort).

The EBITDA threshold is calculated on the basis of the
current year EBITDA of the German business (i.e. the year for which interest deductions should be
claimed). A tax group for German tax purposes

is treated as one business. Interest expense

exceeding the 30% limitation is nondeductible for German corporate income tax and trade tax
purposes (unless one of the exceptions applies) in the year of accrual but may be carried forward.
The interest carry forward is subject to change-in-ownership rules (a direct or indirect ownership
change of more than 25%/50% to one shareholder or a group of shareholders

with similar

objectives), which could result in a partial or complete forfeiture of all interest carry forwards.
Interest expense disallowed under the interest deduction limitation will not trigger withholding
taxes, but may lead to double taxation even within Germany.

Depreciation
Depreciable or amortizable assets comprise fixed assets (tangible and intangible) with a useful life
exceeding one year and diminishing in value over time through wear and tear. Land is not
depreciable. The principal method of depreciation and amortization is the straight-line method. The
declining- balance method is only applicable to movable fixed assets acquired or produced after 31
December
2008 and before 1January 2011. Where economically justified, movable fixed assets may be
depreciated according to the unit-of-production method. In the first year, the annual depreciation or
amortization is reduced by one twelfth for each month that precedes the month of the acquisition or
production. Accelerated depreciation for exceptional wear and tear resulting from technical or
economic causes is permitted only when the straight-line method is used. Acquisition or production
cost of movable fixed assets of up to EUR 150 (exclusive of VAT) may be deducted immediately.
Where the acquisition or production cost exceeds EUR 150, instead of capitalizing each asset, the
taxpayer has the option to:
Either record them individually and write them off immediately if the cost does not exceed
EUR 410 (exclusive of VAT); or
Record them as a collective item and write them off over a period of five years if the cost of
each asset does not exceed EUR 1,000 (exclusive of VAT).
The Ministry of Finance publishes guidelines on tax depreciation rates for a number of assets, based
on their estimated useful lives. For buildings and purchased goodwill the rates are fixed by law.

Industrial buildings are depreciated at a s

tr 15 years using the straight-line

aight-line rate of 3% per annum. Goodwill is amortized

over ertain additional types of depreciation are available for

small
method. C
and medium-sized companies as a tax incentive.
Inventory may be valued at cost or, if lower and impairment is expected to
market

be permanent, at

value. Last-in, first-out (LIFO) is generally acceptable for tax purposes; other cost flow assumptions,
such as first-in, first-out (FIFO), are not allowed.
Write downs due to impairment are only allowed if the value of the asset is expected to be
permanently lower. Write downs of shares in corporations by corporate shareholders and on certain
shareholder loans are not tax deductible.

Provisions
Generally, the creation of provisions is tax deductible. For certain types of provision, restrictions
apply,
e.g. for pension liabilities, provisions for anniversary bonuses and onerous contracts, and for
acquired provisions. For tax purposes, measurement of provisions may not take into account future
increases of prices or costs. Provisions must be discounted by 5.5% unless their duration is less than
12 months at the balance sheet date. For pension liabilities, a discount rate of 6% must be applied.

Losses
Losses up to EUR 1 million may be carried back one year for corporate income tax purposes. No
carryback is available for trade tax purposes. Losses not carried back can be carried forward
indefinitely. However, utilization of loss carry forwards is restricted for annual profits exceeding
EUR 1 million. Only 60% of the excess over EUR 1 million may be offset by the carry forward
losses. The remaining 40% of taxable profits exceeding EUR 1 million is taxed at the regular
rates

taxa

ion rule applies for both corporate income tax and trade tax purposes.
All corporate income tax and trade tax losses, and loss carry forwards, are forfeited if more than
50% of the shares in the loss corporation are transferred directly or indirectly to one acquirer (or to
related parties of an acquirer) within a period of five years. In the case of transfers of more than
25% but less than 50% of the shares to one acquirer (or to related parties of an acquirer) within a
five- year period, losses and loss carry forwards are forfeited on a pro-rata basis. Acquirers acting in
concert are treated as one acquirer in applying the rule. Transfers within a group do not trigger loss
forfeiture
if the same person directly or indirectly owns 100% of the shares in the transferor and the transferee
company. Losses and loss carry forwards also continue to be usable to the extent the loss corporation
has built-in gains which are taxable in Germany. Losses of a controlling entity or a controlled entity

account for foreign tax purposes at

vel of the controlling entity, the controlled entity or any other

the le person.

www2.deloitte.com

German Guide Taxation 2015 edition

Dividends received by German corporations or branches of nonresident corporations generally are

exempt from corporate income tax regardless of how long the participation in the subsidiary has been
held. However, 5% of the gross dividend is added back to taxable income as a nondeductible
expense, resulting in an effective tax exemption of 95%. For dividends paid after 28February

2013, the exemption requires

m shareholding of at least 10% of the share capital at the

ons of 10% or more during the calendar year are deemed to

a minimu beginning of the calendar year
have taken place as at the beginning of that year). The exemption is not granted to banks, financial
(acquisiti
service institutions and financial enterprises including holding companies (in respect of
shares
acquired with the intention of realizing a short-term profit f
life and health insurance companies and pension funds, unless the EU parent-subsidiary directive or a
tax treaty provide otherwise. For tax years beginning after 31 December 2013, the exemption
generally is granted only insofar as the dividend has not been treated as a deductible expense at the
level of the distributing company, irrespec

The 95% exemption also applies to trade tax with the restriction that a minimum shareholding of
15% of the share capital (10% for dividends from companies resident in other EU member states) is
necessary at the beginning of the calendar year. For dividends f
outside the EU, a minimum 15% shareholding must have been held since the beginning of the
calendar year in which the distribution takes place, and the subsidiary must meet certain activity
requirements. Tax treaty provisions prevail.

Profit tax (Corporation tax) Gibraltar

Companies are taxed on income that is accrued in or derived from Gibraltar. Branches are taxed in
the

same manner as companies. Nonresident companies are subject to tax on Gibraltar-source

income.

Taxable income
Corporation tax is imposed on a company's profits, which consist of business/trading income accrued
in and derived from Gibraltar. Investment income from listed securities (except for banks) is not
subject to taxation. Expenses incurred wholly and exclusively in the production of taxable income
may be deducted in computing taxable income. Interest received or receivable from intercompany
loans
Where the interest received or receivable is less than GBP 100,000 per annum, the interest will not be
subject to taxation in Gibraltar unless the income falls within the scope of trading income, as would
be the case for banks, building societies, etc. Interest receivable from all connected companies will
be

e company receiving the income is registered in

Gibraltar.
Taxation of dividends: Dividends are not subject to taxation

The German civil code regulates employment contracts. The commercial code partly covers the
employer-employee relationship and contains regulations on commercial agents.
The rate of income tax in Germany ranges from 0% to 45%. The German income tax is a progressive
tax, which means that the average tax rate (i.e., the ratio of tax and taxable income) increases
monotonically with increasing taxable income. Moreover, the German taxation system warrants that
an increase in taxable income never results in a decrease of the net income after taxation. The latter
property is due to the fact that the marginal tax rate (i.e., the tax paid on one euro additional taxable
income) is always below 100%.
The basic allowance
Beyond this threshold, the marginal tax rate increases linearly from 14% to 24% for a taxable income

change of rates occurs at

marginal tax rate jumps from 42% to 45%.
On top of income tax, the so-called solidarity surcharge (Solidarittszuschlag) is levied at a rate of
5.5% of the income tax for higher incomes.

German social insurance is a statutory system that comprises:

Health insurance: Generally, all individuals resident in Germany are obliged to take out
health insurance. Employees with annual gross salaries of up to EUR 54,900 (2015) must be
enrolled
in the public sector health insurance scheme. The monthly contributions of 14.6% of gross
monthly salaries (up to a salary ceiling of EUR 4,125) are divided equally between employer
and employee who each contribute 7.3%. From 1 January 2015, public health insurance
providers can charge additional monthly contributions which have to be borne by the
employee

(currently

of gross monthly salaries). Employees whose gross salary

for compulsory public sector health insurance may choose

between 0% and 1.3% exceeds
between the public sector and a private health insurance scheme. These employees may claim
the EUR 54,900 ceiling
from their employer an allowance for their health insurance that corresponds to the 7.3%
share
(public sector health insurance) or amounts to half of the contributions to a private health
insurance scheme up to a maximum of EUR 301.13 per month.
Nursing care insurance: For employees with children who are insured under the public sector
health insurance scheme, the monthly contributions from 1 January 2015 are 2.35% of gross
monthly salary (up to a salary ceiling of EUR 4,125). Employers and employees each pay
one-

half of the contributions (except in Saxony where employees are required to pay

1.675% and
employers 0.675%). Employees without children who are insured under the public sector
health insurance scheme pay an additional contribution of 0.25 percentage points, which is
not shared by the employer. This extra contribution does not apply to persons under the age
of 23, persons born before 1 January 1940 or persons currently in military or civil service. If
the employee has opted for private health insurance, he/she must also take out private nursing
care insurance. Employees may claim from their employer an allowance for their private
nursing care insurance that amounts to half of the contributions, restricted to a maximum of
EUR 48.47 per month (EUR27.84 in Saxony).
Accident insurance: The statutory accident insurance covers employees for work-related
accidents and diseases. It is financed entirely by employer contributions, based on gross
salaries. The average contribution amounts to about 2% of gross salaries but varies according
to the economic sector and the category in which a company is classified based on the
risk/danger of its activities.
Unemployment insurance: All wage and salary earners pay 3% of gross salary up to a
monthly
earnings maximum of EUR 6,050 (EUR 5,200 in former Eastern Germany) in respect of
unemployment insurance. Contributions are shared equally between the employer and
employee.
Pension insurance: The statutory pension scheme calls for contributions of 18.7% of gross
monthly salary, up to a salary ceiling of EUR 6,050 (EUR 5,200 in former Eastern Germany).
Employers and employees each pay half. Employees who are temporarily posted to Germany
to work for their foreign employer may not be subject to German statutory social security if,
and to the extent that, the EU social security regulations or bilateral social security
agreements apply.

Salary Tax Italy

Individuals working in Italy are generally subject to social security contributions. Rates vary depen
security in respect of the state pension
fund borne by the employee is generally equal to 9.19%, plus 1% over EUR 46,123 (the ceiling
applicable for the 2015 fiscal year) up to a cap of EUR 100,324 (the ceiling applicable for the 2015
fiscal year) for employees who started contributing to an obligatory social security scheme after 1
January 1996. For those who started contributing before that date, contributions are calculated on the
total amount of employment income received.
An additional 10% tax is levied on bonuses, stock options and variable payments paid to directors
operating in the financial sector. The tax is payable only on the portion of variable compensation
exceeding the fixed remuneration.

1.2.4 Local taxes (Germany)

Aviation Tax
From 2011-01-01 on, all passenger flights departing from Germany will be subject to the aviation
tax. The amount of tax to be paid depends on the distance to the final destination. Flights to a
destination up to 2,500
of up to 6,000
the

taken into account is that for

entire journey as booked. For flights involving a transfer or short stopover, this means that the tax
only becomes chargeable on the initial departure.
Motor vehicle tax
Vehicle tax (Kraftfahrzeugsteuer) is compulsory. It is payable for a year in advance at the request of
the local tax office (Finanzamt), but larger sums may be paid in instalments subject to a surcharge.
The registered keeper of a vehicle is liable for the tax in Germany which is based on engine size and
CO2 emissions.

tion of road tax on new cars registered after the 1st January

There are two components to

the calcula 2012:
Engine size
engines
CO2
emissions

engines emitting less than 110 gms/km are exempt and the tax above that
.

Motor vehicle and vessel tax in China

At this moment, this tax is only applied to the enterprises with foreign investment, foreign
enterprises, and foreigners. The users of the taxable vehicles and vessels are taxpayers of this tax.
The tax amount per unit is different for vehicles and vessels:
a.Tax amount per unit for vehicles: 15-80 yuan per passenger vehicle per quarter; 4-15 yuan per net
tonnage per quarter for cargo vehicles; 5-20 yuan per motorcycle per quarter. 0.3-8 yuan per

non-

motored vehicle per quarter.

b.Tax amount per unit for vessels: 0.3- 1.1 yuan per net tonnage per quarter for motorized vessels;
0.15-0.35 yuan per non-motorized vessel.
The tax base for vehicles is the quantity or the net tonnage of taxable vehicles. The tax base for
vessels

is the net-tonnage or the deadweight tonnage of the taxable vessels. The formula for

computing the tax payable is:

a. Tax payable = Quantity (or net-tonnage) of taxable vehicles Applicable tax amount per unit b.
Tax payable = Net-tonnage (or deadweight tonnage) of taxable vessels Applicable tax amount per
unit Tax exemptions may be given on the vehicles used by Embassies and Consulates in China; the
vehicles used by diplomatic representatives, consuls, administrative and technical staffs and their
spouses and non-grown-up children living together with them.
Tax exemptions may be given as stipulated in some provinces and municipalities on the fire vehicles,
ambulances, water sprinkling vehicles and similar vehicles of enterprises with foreign investment and
foreign enterprises.

1.3 Presentation of indir ect taxes

An indirect tax (such as sales tax, a specific tax, value added tax (VAT), or goods and services tax
(GST)) is a tax collected by an intermediary (such as a retail store) from the person who bears the
ultimate economic burden of the tax (such as the consumer). The intermediary later files a tax return
and forwards the tax proceeds to government with the return. In this sense, the term indirect tax is
contrasted with a direct tax which is collected directly by government from the persons (legal or
natural) on which it is imposed. Some commentators have argued that "a direct tax is one that cannot
be shifted by the taxpayer to someone else, whereas an indirect tax can be."
An indirect tax may increase the price of a good so that consumers are actually paying the tax by
paying more for the products. Examples would be fuel, liquor, and cigarette taxes. An excise duty on
motor cars is paid in the first instance by the manufacturer of the cars; ultimately the manufacturer
transfers the burden of this duty to the buyer of the car in form of a higher price. Thus, an indirect tax
is such which can be shifted or passed on. The degree to which the burden of a tax is shifted
determines whether a tax is primarily direct or primarily indirect. This is a function of the relative
elasticity of the supply and demand of the goods or services being taxed.
Sales Tax
People shop every day for groceries, clothing, electronics and household goods. At the cash register
we are given a total that includes a percentage of our purchase, usually between 4 and 10 percent,
that is a sales tax. This added fee is then collected and submitted to local, state and federal agencies,
where it is disbursed to a variety of programs and projects. Everyday items are not the only ones that
incur sales taxes. Larger ticket items such as vehicles and homes are subject to the same form of
taxation. Services are susceptible to sales tax as well. For instance, if a repair person enters a home
for the purpose of fixing the plumbing or any other home repair, the parts used to make the repair
demand a sales tax. Often people are taxed on the whole bill, both parts and service.
Customs Tax
Customs taxes are applied to imported and exported products. These taxes are determined by the
cities

and states that house seaports. People are usually unaware of the taxes associated with

imported and exported goods, though all consumers pay them regardless of how much income they
earn. Manufacturers and merchants pass along higher prices to consumers to offset the taxes they
must pay when buying or selling raw materials or finished goods.

Excise Tax
aterials and paid for by manufacturers at the initial stage.
Excise taxes are placed mostly on raw m
For manufacturers, this tax is simply a cost of doing business. To help offset the costs, they pass
them to consumers on the finished goods. This creates another layer of indirect taxes that the average
consumer pays.
Gas Tax
Gas tax is another indirect tax that consumers pay whenever
they buy gasoline for their vehicles. Gas taxes are buried in the price per gallon. They include state
and federal taxes.

Value added tax (VAT) is a sales tax levied at each stage of the production and distribution chain.
In general, VAT is charged on most supplies of goods and services by an entrepreneur in the course of
a business activity carried out in Germany, on intra-EU acquisitions, certain other receipts of
supplies and on imports of goods from outside the EU. It is normally collected from the entrepreneur
making the supply but passed on to the customer by adding it to the purchase price. In some cases,
the receiving entrepreneur or legal entity is liable to tax (under the reverse charge mechanism). In
the chain of entrepreneurs, VAT generally should be tax neutral at each stage until the goods or
services reach the

final customer (or are used for tax-exempt supplies). The tax is largely

harmonized within the EU.

The standard rate of VAT in Germany is 19%, with a reduced rate of 7% applying to certain consumer
goods and everyday services (such as food, books, magazines and newspapers, entertainment, local
public transport and hotel accommodation). Some supplies are zero-rated or tax exempt. Zero-rating
(exemption with input tax recovery) mainly applies to intra-EU supplies, exports to non-EU countries
and cross-border transports of goods to and from non-EU countries.
Exempt activities (no input tax recovery) include most financial, insurance and universal postal
services; transfers and letting or leasing of immovable property; services linked to health and social
welfare work, and certain educational and cultural services. In some cases, the entrepreneur may opt
for taxation of exempt supplies. Small entrepreneurs resident in Germany are exempt from VAT if

their total turnover (excluding certain ex

em year and is expected not to exceed

pt supplies) has not exceeded EUR 17,500 in the previous

0,000 in the current year. They may opt to be taxedunder

the
EUR 5
normal rules. The VAT liability of a taxable entrepreneur is computed by deducting recoverable
input VAT from total output VAT. An excess of input over output VAT is refunded. Certain
formal
requirements need to be met for the deduction of input VAT, e.g. concerning the content of the
invoice.
The tax assessment period for VAT is the calendar year. However, entrepreneurs must usually file
preliminary returns on a monthly basis. Quarterly returns are made where the VAT payable in the
preceding calendar year did not exceed EUR 7,500. No preliminary returns are necessary when the
VAT payable did not exceed EUR 1,000 in the preceding calendar year. Preliminary returns must be
submitted electronically, and the VAT due must be paid, within 10 days after the end of the filing
period. A one month filing and remittance extension is granted if, in the case of a monthly filing
repayments is made. The annual return has to
be filed by 31 May of the following year (a filing extension may be obtained). When a professional
tax advisor prepares the return, the due date is automatically extended to 31 December of the
following year; however, the tax authorities may request that the taxpayer file the tax return earlier.
Generally,
the tax is self-assessed. Payment of the VAT
liability from the annual return, if any, is due one month after submission of the return. Additional
reporting obligations may exist in respect of intra-EU supplies of goods or services (filing of a
European Sales List and Intrastat declaration).
Nonresident entrepreneurs, i.e. entrepreneurs
who do not have a registered office, place of management or fixed establishment in Germany, must
register for VAT purposes and file VAT returns if they make supplies in Germany which do not fall
under the reverse charge regime. The reverse charge regime is applicable, among others, to work
supplies and services of nonresident entrepreneurs to (resident or nonresident) entrepreneurs or legal
entities (including those under public law). Under the regime, the person who receives the supply is
obliged to pay the VAT to the tax authorities. The reverse charge mechanism does not apply where
the supplies or services are made to private persons.
Nonresident entrepreneurs who are not and
need not be registered for VAT purposes and therefore do not file VAT returns, may apply for a
refund of input VAT via a special refund procedure. For

nonresident EU entrepreneurs, the

application must be submitted electronically in the EU country of

residence no later than 30

September following the calendar year to which the refund claim relates. Nonresident entrepreneurs
from outside the EU must submit their application to the Federal Tax Office by 30 June following the

reciprocity, i.e. the other jurisdiction

mus or not levy VAT or a similar

t operate similar refund procedures for German

entrepreneurs nd claim must be at least EUR 50 (EUR 500

for nonresident
tax. The refu
entrepreneurs located outside the EU) if the period for which the refund is claimed is the calendar
year or the last period of the calendar year, otherwise a minimum of EUR 400 is required (EUR
1,000 for
nonresident entrepreneurs located outside the EU).VAT grouping (Organschaft) allows a parent
company and its subsidiary to be treated as a single entrepreneur for VAT purposes. The VAT return
must be filed by the parent company for the whole group. Intragroup transactions between the
members of the group are disregarded. VAT grouping requires that the subsidiary is financially,
economically and organizationally integrated into the business of the parent company. The parent
company generally must hold more than 50% of the shares of the subsidiary. In addition, certain
organizational arrangements are necessary which ensure that the parent company controls the dayto-day management of the subsidiary
Value added tax In Kenya
VAT is imposed on the supply of taxable goods and services made or provided in Kenya by a taxable
person in the course of or in furtherance of any business carried on by that person and on the
importation of goods and services into Kenya. The standard rate is 16%, although certain supplies
are exempt or zero-rated. According to the VAT Act that became effective in 2013, certain categories
of oil and fuels will continue to be exempt for three years, after which they will become zero-rated
(unless the exemption is revoked earlier).
Registration is compulsory where the turnover of taxable supplies is, or is expected to be, KES 5
million or more in a 12-month period.
VAT returns and any related payments are due by the 20th day of the following month. Late payment
of VAT results in a penalty of 2% compounded monthly. Failure to submit VAT returns results in a
penalty of 5% of the tax due (minimum penalty of KES 10,000) while failure to apply for VAT
registration results in a fine of KES 100,000.

As a member of the EU, no customs duties are imposed on goods from other member states.
However, goods imported from outside the EU generally are subject to customs duties.

Germany levies excise duties on various items, including tobacco, alcohol, petrol, oil and heating oil.
Import duty and taxes are due when imp orting goods into Germany from outside of the EU whether
by a private individual or a commercial entity. The import duty and taxes payable are calculated on
the CIF value, i.e. the sum of the value of the imported goods and the cost of shipping and insurance.
The duty rates applied to imports into Germany typically
range between 0% (for example books) and 17% (for example Wellington Boots). Some products,
such as Laptops, Mobile Phones, Digital cameras and Video Game consoles, are duty free. Certain
goods may be subject to additional duties depending on the country of manufacture, for example
Bicycles made in China carry an additional (anti-dumping) duty of 48.5%.
The standard VAT rate for importing items into Germany is
19%, with certain products, for example books, newspapers and magazines, attracting VAT at the
reduced rate of 7%. VAT is calculated on the value of the goods, plus the international shipping costs
and insurance, plus any import duty due.
For imports into Germany, there are minimum
thresholds below which duty and VAT are waived. Duty is not charged if:
the FOB value, i.e. the value of the goods
excluding shipping and insurance cost, does not

VAT is not charged if:

the FOB value, i.e. the value of the goods
excluding shipping and insurance cost, does not

Both duty and VAT are waived if:

Other taxes and customs fees: Excise duty is payable on for example tobacco and alcohol. Additional
customs fees can be charged to cover the expense of performing any required examinations,
verification and or testing of the imported goods.

Custom Taxes in South Africa

Import duty and taxes are due when importing goods into South Africa whether by a private
individual or a commercial entity. The valuation method is FOB (Free on Board), which means that
the import duty and taxes payable are calculated exclusively on the value of the imported goods.
However, some duties are based part in value and part in quantity. In addition to duty, imports are
subject to sales tax

s (e.g. perfume) may be subject to additional ad valorem

(VAT). Certain luxury or non-essential item
bject to anti-dumping or countervailing duties.
duties, and some commodities may be su
Duty rates in South Africa vary from 0% to 45%, with an average duty rate of 18.74%. Some
goods are not subject to duty (e.g. laptops, electric guitars and other electronic products).
VAT applies to most imports at 14% of the sum of FOB value, any duty and excise payable, and
a 10% upliftment of the FOB value. There is no minimum threshold in South Africa, i.e. duty, VAT
and other taxes where applicable, are payable regardless of the import value.
Anti-dumping and countervailing duties are levied:
on goods considered to be "dumped" in South Africa;
and on subsidized imported goods.
These goods are the subject of investigations into pricing and export incentives in the country of
origin; the rate imposed will depend on the result of the investigations. These duties are either levied
on an ad valorem basis (as a percentage of the value of the goods) or as a specific duty (as cents per
unit).

Environmental taxes
Taxes levied on oil, natural gas and electricity provide
re to the state-run social security system.
Insurance premiums
The standard tax on general insurance premiums is 19%
Excise duties in Germany
Excise tax in Germany is a type of tax charged on goods produced within the country (as opposed to
custom duties, charged on goods from outside the country). Typical examples of excise duties are in
Germany on gasoline, tobacco and alcohol. Excise duty is also a tax levied on the producer of these
goods. In Germany is it a separate tax from VAT, and is different from it in that VAT solely affects
the consumer. The consumer also indirectly pays the excise, as it is included in the eventual sale
price of the product.

Beer
Minimum excise duty in EU is 0.748 EUR per ht/degree Plato of finished product (Article 6 of
Directive 92/84EEC). In Germany is 0.787 EUR per hl/degree Plato of finished product Plato. In
Germany are the reduced rates:
under 5 000 hl the rate is 0.4407 EUR per ht/degree Plato
under 10 000 hl the rate is 0.5288 EUR per ht/degree Plato
under 20 000 hl the rate is 0.6170 EUR per ht/degree
Plato under 40 000 hl the rate is 0.6610 EUR per
ht/degree Plato
The rate by EU law may not be set more than 50 below the
standard national rate.
The rate in Germany is 136 EUR per hectoliter sparkling wine and 51 EUR per hectoliter per stillsparkling wine (not exceeding 8.5 %).
The rate in Germany is 136 EUR per hectoliter and 51 EUR per hectoliter by other still fermented
beverages (not exceeding 8.5 %).
Minimum excise duty in EU is 45 EUR per hectoliter of product (Article 17 of Directive 92/83EEC).
In Germany is the rate 153 EUR per hectoliter of product (by product with alcohol from 15 % to 22
% vol.) and 136 EUR per hectoliter of product (by product with alcohol up 15 % vol.).
Minimum excise duty in EU is 550 EUR or 1000 EUR per hectoliter of pure alcohol (Article 20 of
Directive 92/83EEC). In Germany is the rate 1303 EUR per hectoliter of pure alcohol, the reduced
rate is 730 EUR per hectoliter. The rate by EU law may not be set more than 50 below the standard
national rate.

Cigarettes
The tax rate is 82.70 EUR per 1000 pieces.
Cigars and Cigarillos
The tax rate is 14 EUR per 1000 pieces.
Fine cut smoking tobacco
The tax rate is 34.06 EUR per 1000 pieces.
Other smoking tobaccos
The tax rate is 15.66 EUR per 1000 pieces.
Minimum excise duty in EU is 421 EUR per 1000 liter. In Germany is the rate 721 EUR per 1000
liter.

Environmental taxes in South Africa

New passenger motor vehicles with carbon dioxide (CO2) emissions in excess of 120g/km and motor
vehicles used for the transportation of goods with CO2 emissions exceeding 175g/km, manufactured
in or imported into South Africa, attract a CO2environmental levy. The CO2 emission levy is

not

payable on motor vehicles that can transport 10 or more persons or new motor vehicles manufactured
and cleared for home consumption for the following purposes:
cles;

-road logging trucks and road tractors;

ally disabled persons, or adapted or to

be adapted for the transport of physically disabled persons;
to be adapted to be driven solely by a physically disabled person;
and representatives.

Various levies

South Africa

The Financial Services Board imposes various levies on financial institutions. Donations (gift) tax is
payable by a donor at a rate of 20% of the value of property donated by South African residents
(nonpublic companies), subject to certain exemptions. There are exemptions for donations up to
ZAR 10,000, prorated per year of assessment, in the case of donors other than individuals.