Trade tax return in Germany, also for small businesses

Do you run a trade, perhaps as a small business owner? Then you file a trade tax (Gewerbesteuer) return if your trade income is over €24,500, loss carry-forwards were determined separately, or the tax office asks for it (§ 25 (1) GewStDV). Without a tax advisor, the deadline is seven months after the year ends; for 2026: 2 August 2027.

Last updated: 30 October 2026

Current deadlines (as of 30 October 2026)

Trade tax return for 2026: Monday, 2 August 2027 without a tax advisor; with a tax advisor the end of February 2028 (§ 149 (2) and (3) AO).
Trade tax return for 2025 with a tax advisor: the last day of February 2027 is a Sunday, so the deadline ends on Monday, 1 March 2027 (§ 149 (3) no. 3 AO, § 108 (3) AO).
Allowance and rate: 24,500 euros allowance for sole proprietors and partnerships, base rate 3.5 per cent (§ 11 GewStG); unchanged in 2026.
VAT return (Umsatzsteuer-Voranmeldung): October 2026 (and Q3 with a permanent extension) by Tuesday, 10 November 2026; November by Thursday, 10 December 2026; December 2026 or Q4 by Monday, 11 January 2027, because 10 January is a Sunday (§ 18 (1) UStG, § 108 (3) AO).

What this means for you: Trade tax is separate from the VAT return: the next dated step is the VAT return on 10 November 2026, the 2026 trade tax return follows in August 2027.

In short

Allowance: The first €24,500 of trade income stay free for individuals and partnerships (§ 11 (1) GewStG).
Calculation: Trade income minus the allowance, times 3.5 percent, times the multiplier of your municipality gives the trade tax.
Income tax credit: Trade tax is not a business expense (§ 4 (5b) EStG), but income tax is reduced by 4 times the trade tax base amount (§ 35 (1) EStG).
Apportionment: With permanent establishments in several municipalities, the tax base amount is distributed among the municipalities (§ 28 GewStG).

What is trade tax (Gewerbesteuer) in Germany and how much is it?

Trade tax is a municipal tax on the profit of a business. It is worked out in three steps:

The trade income is reduced by an allowance of 24,500 euros for individuals and partnerships (§ 11 para. 1 GewStG).
The remainder is multiplied by the base rate of 3.5 percent (§ 11 para. 2 GewStG), which gives the tax base amount.
Your municipality's multiplier (Hebesatz) is applied to it (§ 16 GewStG); if the municipality sets no higher multiplier, the statutory one is 200 percent up to 2026 and 280 percent from 2027 (§ 16 para. 4 sentence 2 and § 36 para. 5b GewStG).

Example (invented numbers): Trade income 50,000 euros. 50,000 minus 24,500 is 25,500. 25,500 times 3.5 percent is 892.50 euros. At a multiplier of 400 percent the trade tax is 3,570 euros. Part of it is credited against your income tax: the income tax is reduced by four times the tax base amount (§ 35 EStG), within the ceiling set in that section.

What this means for you: Below 24,500 euros of trade income you pay no trade tax; above it, the tax depends on your municipality's multiplier.

What is trade tax, and who pays it?

Trade tax is a municipal tax: the municipalities levy it (§ 1 GewStG). Every permanent trade business is subject to it, as far as it is operated in Germany. A trade business is a commercial enterprise within the meaning of the Income Tax Act (§ 2 (1) GewStG).

Under the Income Tax Act, an independent, sustained activity undertaken with the intention of making a profit and amounting to participation in general economic activity is a trade business – if it is neither agriculture and forestry nor a liberal profession nor other independent work (§ 15 (2) sentence 1 EStG). A freelance activity is therefore not a trade business.

The person liable is the entrepreneur; if the activity of a partnership is a trade business, it is the partnership (§ 5 (1) GewStG). The tax is set and levied on the basis of the tax base amount with a percentage, the multiplier (Hebesatz); the municipality determines the multiplier (§ 16 (1) GewStG). It is the same for all businesses in the municipality and is 200 percent if the municipality has not set a higher one; from the 2027 assessment period it is 280 percent (§ 16 (4) GewStG, § 36 (5b) GewStG).

What this means for you: if your activity is a trade business, the municipality, not the tax office alone, decides how high your tax is; freelancers are outside trade tax.

How do I calculate trade tax? An example

The starting point is the profit from the trade business. It is increased by the add-backs (§ 8 GewStG) and reduced by the deductions (§ 9 GewStG); this gives the trade income (§ 7 sentence 1 GewStG). The trade income is rounded down to full €100 and, for individuals and partnerships, reduced by the allowance of €24,500, but at most by the rounded-down trade income. The base rate of 3.5 percent is applied to the remainder; this gives the tax base amount (§ 11 GewStG). The trade tax is the tax base amount times the multiplier of your municipality.

Step	Example
Profit from the trade business (before add-backs and deductions)	€40,850
Trade income, rounded down to full €100	€40,800
Allowance	-€24,500
Remainder to which the base rate is applied	€16,300
Tax base amount (3.5 percent)	€570.50
Trade tax at a multiplier of 400 percent	€2,282

The example is simplified: it has no add-backs and deductions, and the multiplier of 400 percent is assumed – your municipality determines your multiplier.

What this means for you: with the first €24,500 of trade income free, only profit above that is taxed, and your municipality's multiplier sets the euro amount.

Can I credit trade tax against my income tax?

Yes, in part. The trade tax itself is not a business expense (§ 4 (5b) EStG). Instead, your income tax is reduced by 4 times the trade tax base amount fixed for the year (§ 35 (1) sentence 1 no. 1 EStG). The reduction is limited to the trade tax you actually have to pay (§ 35 (1) sentence 5 EStG) and to the maximum amount from the formula in § 35 (1) sentence 2 EStG, which depends on your income tax on trade income. The tax base amount from the example above is €570.50; four times that is €2,282.

Multiplier of the municipality	Trade tax	Maximum credit (4 x €570.50, at most the trade tax)	Part of the trade tax not offset
300 percent	€1,711.50	€1,711.50	€0
400 percent	€2,282.00	€2,282.00	€0
450 percent	€2,567.25	€2,282.00	€285.25

The table shows the upper limit of the credit only; it assumes that your income tax on the trade income is high enough to use it (§ 35 (1) sentence 2 EStG). The credit is claimed in the income tax assessment, not in the trade tax return.

What this means for you: at a multiplier up to 400 percent the credit can cover the whole trade tax; above that, the difference is your real burden. Check your municipality's multiplier before you plan.

Who has to file the trade tax return?

The person liable has to file: for trade businesses subject to tax, they submit a return for the determination of the tax base amount (§ 14a sentence 1 GewStG). The tax base amount is determined for the assessment period after it has ended; the assessment period is the calendar year (§ 14 GewStG). In concrete terms:

Sole proprietors with a trade business: You file the return if your trade income exceeds €24,500, if loss carry-forwards are determined separately or if the tax office asks for it (§ 25 (1) GewStDV). Whether your activity is a trade business is determined by § 15 (2) EStG.
Partnership: The partnership is the person liable (§ 5 (1) sentence 3 GewStG) and files the return on the same conditions (§ 25 (1) GewStDV).
Corporation, for example a GmbH: Its activity always and in full counts as a trade business (§ 2 (2) sentence 1 GewStG).
Freelancers: No trade tax return, because there is no trade business (§ 15 (2) EStG).

What this means for you: check three triggers (income over €24,500, separately determined loss carry-forwards, request from the tax office); if none applies, you file nothing.

Does this also apply to small business owners?

Small business owner (Kleinunternehmer) is a VAT term: a sale is exempt from VAT if the total turnover in the previous calendar year did not exceed €25,000 and does not exceed €100,000 in the current calendar year (§ 19 (1) sentence 1 UStG). This has no effect on trade tax. Trade tax is tied to the trade business (§ 2 (1) GewStG) and calculated with the profit, not with the turnover (§ 7 sentence 1 GewStG). As a small business owner with a trade business, the same applies to the trade tax return as for any trader (§ 25 (1) GewStDV, see below); as a freelancer, you file none. What you then have to pay depends on the trade income:

Trade income up to €24,500: The tax base amount is zero; no trade tax is due.
Trade income above €24,500: The part above it gives the tax base amount with 3.5 percent, and with the multiplier of your municipality the trade tax. With a trade income of €30,000, that is €5,500 and a tax base amount of €192.50.

Do I have to file if no tax is due? That depends on § 25 (1) GewStDV. According to it, you file the trade tax return if your trade income exceeded €24,500 in the assessment period (no. 1), if loss carry-forwards (vortragsfähige Fehlbeträge) were determined separately at the end of the previous assessment period (no. 6), or if the tax office specifically asks for a trade tax return (no. 7; likewise § 149 (1) sentence 2 AO). Corporations such as a GmbH always file it unless they are exempt from trade tax (no. 2). If your trade income is €24,500 or less, no loss carry-forwards were determined and the tax office does not ask for a return, you do not have to file one. If you are unsure, ask your tax office or a tax advisor.

For the EU small business scheme, see Applying for the EU small business scheme in Germany.

What this means for you: being a small business owner for VAT does not release you from the trade tax return; only your trade income and the three triggers count.

Where do I find form GewSt 1 A, and how do I file it?

You file the trade tax return electronically: the person liable submits it in the officially prescribed data format via the officially designated interface (§ 14a sentence 1 GewStG). The form is called GewSt 1 A. You find it on elster.de under “Forms and services” (“Formulare und Leistungen”) and choose the calendar year – on 21 October 2026, the years 2019 to 2025 were available.

The form contains the trade tax return, the return for the separate determination of the trade loss, the return for the separate determination of the donation carry-forward and the Annex EMU to the return on loss offsetting at the level of the co-entrepreneur.

You only need a PDF to print in exceptional cases: on application, the tax authority can waive electronic transmission to avoid undue hardship. Then you file the return on the officially prescribed form and sign it by hand (§ 14a sentence 2 GewStG).

For each independent business, you file a separate return. If you have several businesses of different kinds as a sole proprietor, you submit a separate trade tax return for each business.

What this means for you: plan an electronic filing with form GewSt 1 A; paper is only for hardship cases approved by the tax authority.

What is the apportionment (Zerlegung) for permanent establishments in several municipalities?

If you maintained permanent establishments in several municipalities during the assessment period, the tax base amount is apportioned into the shares attributable to the individual municipalities, the apportionment shares (§ 28 (1) sentence 1 GewStG). This also applies if a permanent establishment extends over several municipalities or was moved to another municipality during the year (§ 28 (1) sentence 2 GewStG). Each municipality levies the trade tax on the part of the tax base amount that is attributable to it (§ 4 (1) sentence 2 GewStG).

The basic apportionment key is the ratio of wages: the wages in the permanent establishments of the individual municipality to the total wages of all permanent establishments (§ 29 (1) no. 1 GewStG). The wages are rounded down to full €1,000 (§ 29 (3) GewStG). For businesses not operated by a legal entity, the law applies a total of €25,000 per year for the entrepreneurs working in the business (§ 31 (5) GewStG).

A simplified example: the tax base amount is €1,000; in municipality A, wages of €60,000 were incurred, in municipality B €40,000.

Municipality	Wages	Share	Apportionment share
A	€60,000	60 percent	€600
B	€40,000	40 percent	€400

You file the apportionment return in the cases of § 28 in addition to the return for the determination of the tax base amount, also electronically (§ 14a sentence 1 GewStG). Other keys apply to certain businesses, for example businesses that exclusively operate installations for generating electricity and other energy sources and heat from wind energy and solar radiation (§ 29 (1) no. 2 GewStG).

What this means for you: a second establishment in another municipality means an extra apportionment return and a split of the tax base amount by wages.

By when do I have to file, and what does being late cost?

Without a tax advisor: § 14a GewStG names no deadline of its own; § 149 (2) sentence 1 AO applies: seven months after the end of the calendar year at the latest. For 2026, that would be 31 July 2027, a Saturday; the deadline therefore ends on Monday, 2 August 2027 (§ 108 (3) AO).
With a tax advisor: If a tax advisor prepares the return, a longer deadline applies: the last day of February of the second calendar year following the assessment period (§ 149 (3) no. 3 AO) – so for 2026 the end of February 2028.
Too late: If you do not file the return or do not file it on time, the tax office can set a late-filing surcharge (§ 152 (1) sentence 1 AO).

Deadlines for the income tax return are in Income tax return for the self-employed: deadlines.

What this means for you: put 2 August 2027 in your calendar for the 2026 return, or the end of February 2028 if a tax advisor files it.

Which mistakes happen often?

Confusing the trade registration with the trade tax return. The notification to the trade office (§ 14 GewO) does not replace the return to the tax office.
Not filing although you have to. This applies to trade income over €24,500, to loss carry-forwards determined separately and when the tax office asks for the return (§ 25 (1) GewStDV); if in doubt, ask your tax office.
Assuming the allowance for every legal form. The €24,500 apply only to individuals and partnerships (§ 11 (1) sentence 3 no. 1 GewStG).
Confusing the tax base amount with the trade tax. The tax only results with the multiplier of your municipality.
Several businesses in one return. For each business there is a separate trade tax return.
Forgetting the apportionment. With permanent establishments in several municipalities, an apportionment return is added (§ 14a sentence 1 GewStG).

If you close the business, see Closing your business as an online seller: tax steps.

What this means for you: run through this list once before you send the return; each point is a typical reason for a query from the tax office.

How VAT GPT helps with the trade tax return

Upload: You upload your Amazon or eBay CSV report and your invoices. The AI reads amounts, countries and tax rates.
Check: You check and confirm the values and create your EÜR in the same account and, from it, the trade tax return (form GewSt 1 A). VAT GPT shows you profit, trade income, allowance and tax base amount step by step; you can adjust all values before sending.
Send: With VAT GPT Pro it goes via ELSTER to the tax office.

If you enter the multiplier of your municipality, VAT GPT also shows you the trade tax; the tax office then sets the tax base amount (§ 14 GewStG). If you have permanent establishments in several municipalities, you enter the municipalities and their wages; VAT GPT calculates the shares and, as soon as your details are complete, sends the apportionment return (GewSt 1 D) together with the trade tax return. You register your trade with the trade office yourself. There is Free (basic features, free of charge), Go (30 days free with all Pro features) and Pro. Try for Free Now

Frequently asked questions about the trade tax return

Do I have to file a trade tax return as a small business owner? Like any trader, if your trade income exceeds €24,500, if loss carry-forwards were determined separately or if the tax office asks for the return (§ 25 (1) GewStDV): the small business scheme only concerns VAT. As a freelancer, you do not run a trade business and do not file a trade tax return. If you are unsure, ask your tax office.

From when do I pay trade tax? When your trade income, rounded down to full €100, exceeds the allowance: €24,500 for individuals and partnerships. Below it, the tax base amount is zero.

Is there a PDF of the trade tax return? Only in exceptional cases. The return goes to the tax office electronically, for example with form GewSt 1 A. A paper form exists only if the tax authority waives electronic transmission on application because of undue hardship.

By when do I have to file the 2026 trade tax return? Seven months after the end of the year at the latest: by Monday, 2 August 2027, because 31 July 2027 is a Saturday. With a tax advisor, a longer deadline applies, for 2026 until the end of February 2028.

Who sets the multiplier? Your municipality. It is the same for all businesses in the municipality and is 200 percent if the municipality has not set a higher one; from the 2027 assessment period it is 280 percent.

What does apportionment mean for trade tax? The tax base amount is distributed among the municipalities where you have permanent establishments – basically in proportion to the wages paid. You file the apportionment return in addition to the trade tax return.

What is trade tax (Gewerbesteuer) in Germany? Trade tax is a municipal tax on the profit of a trade business. Freelancers do not pay it. Individuals and partnerships have an allowance of 24,500 euros of trade income (§ 11 para. 1 GewStG), so below that amount no trade tax is due.

How much trade tax do I pay in Germany? Trade income minus the 24,500 euro allowance, times the base rate of 3.5 percent, times your municipality’s multiplier (Hebesatz) (§ 11 and § 16 GewStG). Example with invented numbers: 50,000 euros trade income, minus 24,500, gives 25,500; times 3.5 percent is 892.50 euros; at a multiplier of 400 percent the trade tax is 3,570 euros. Part of it is credited against your income tax (§ 35 EStG).