Germany
| Category | Rank | Score |
|---|---|---|
| Overall Rank | 16 | 67.19 |
| Corporate Taxes | 27 | 49.75 |
| Individual Taxes | 28 | 50.48 |
| Consumption Taxes | 11 | 74.38 |
| Property Taxes | 11 | 68.83 |
| Crossborder Taxes | 6 | 89.96 |
Germany ranks 16th overall on the 2021 International Tax Competitiveness Index, one place worse than in 2020.
Strengths
- The VAT rate of 19 percent is near the OECD average (19.2 percent) and the VAT compliance burden is relatively low.
- Germany has a broad tax treaty network, with 96 countries.
- Inventory can receive Last-In-First-Out treatment, the most neutral treatment of inventory costs.
Weaknesses
- Germany has the fifth highest corporate income tax rate among OECD countries, at 29.9 percent.
- The personal income tax is complex with an associated compliance burden of 134 hours-the third highest among OECD countries.
- Companies are limited in the amount of net operating losses they can use to offset income on future or previous tax returns.
Learn more about the tax system in Germany