Trade Tax Return in Germany: Deadlines, Allowance and Prepayments for Businesses

Anyone who runs a trade business in Germany must submit a trade tax (Gewerbesteuer) return to the tax office every year and make prepayments during the year. Knowing the deadlines and the allowance helps you avoid unnecessary surcharges and keep liquidity planning under control.

In brief: Under §§ 19 and 25 GewStG (German Trade Tax Act), trade businesses must file a trade tax return every year and make prepayments on 15.02., 15.05., 15.08. and 15.11. (15 February, 15 May, 15 August and 15 November). Sole proprietors, partnerships and corporations with a commercial activity are affected; freelancers are exempt. Missing the deadline risks late-filing surcharges.

Who is liable for trade tax?

Anyone who carries on a commercial activity within the meaning of the Trade Tax Act is liable for trade tax; this applies equally to sole proprietors, partnerships such as the GbR, OHG or KG, and corporations such as the GmbH. Freelancers within the meaning of income tax law, such as doctors, architects or tax advisers, are exempt from trade tax. Classification does not depend on legal form alone but above all on the type of activity carried out: a corporation such as the GmbH is always liable for trade tax by virtue of its legal form, whereas for sole proprietors and partnerships the activity actually carried out is decisive. Anyone who is unsure whether their own activity counts as commercial or freelance should clarify this early with the tax office or a tax adviser, since the classification determines the entire tax liability. A tool such as Company Audit shows which of these obligations apply to your company in concrete terms.

What do you need to do in practice?

Trade businesses must file a trade tax return electronically with the tax office every year and also transfer the assessed prepayments on time. The return is based on the trade earnings (Gewerbeertrag), which result from the taxable profit plus certain add-backs and minus deductions. For natural persons and partnerships, an allowance of €24,500 is deducted from this before trade tax is calculated; corporations are not entitled to this allowance. Based on the trade earnings determined, the tax office sets the trade tax base amount (Gewerbesteuermessbetrag), from which the municipality calculates the actual trade tax using its multiplier (Hebesatz). Only with the municipality's trade tax assessment is the final amount payable known, which is why it pays to reconcile it with the prepayments already made.

By when and how often do you have to pay?

The annual trade tax return is to be filed once a year, while prepayments fall due four times a year. The statutory prepayment dates are 15.02., 15.05., 15.08. and 15.11. of each year. These four dates apply regardless of the company's individual financial year and are equally binding for all businesses liable for trade tax. The amount of the prepayments is generally based on the most recently assessed base amount; if the earnings situation changes significantly, an adjustment can be requested from the tax office.

What are the consequences of a violation?

If the trade tax return is not filed on time, late-filing surcharges are possible. Late-payment surcharges may also apply to late prepayments, since the dates are fixed by law and cannot be postponed informally. Anyone who foresees difficulty in meeting a deadline should contact the tax office early instead of letting the deadline pass. For business planning, it is advisable to anchor the four prepayment dates in the calendar just as firmly as the annual deadline for the return itself.

How do you proceed step by step?

The following steps guide trade businesses safely through the annual trade tax return and the prepayments during the year:

1. Check whether the activity is commercial (not freelance) and trade tax liability therefore exists.
2. Determine the trade earnings and, where applicable, take the €24,500 allowance into account.
3. File the annual trade tax return electronically.
4. Plan the quarterly prepayments for the four statutory dates.
5. Check the base amount assessment and the municipality's assessment for the correct multiplier.

Two points are particularly relevant in practice: the multiplier varies, at times considerably, from municipality to municipality and should be considered when choosing the business location; anyone planning a new site should include the multiplier of the municipality concerned in the calculation, just like rent and personnel costs. In addition, trade tax paid is partly credited against income tax for natural persons, so that the actual burden is lower than the tax assessment initially suggests.

Frequently asked questions

Are freelancers liable for trade tax?

No. Freelancers are not liable for trade tax, since they carry out a freelance rather than a commercial activity. What matters is the activity actually carried out, not merely the job title chosen.

How high is the trade tax allowance?

An allowance of €24,500 applies to natural persons and partnerships. Corporations such as the GmbH have no allowance; for them, the entire trade earnings form the basis of the calculation.

When are the trade tax prepayments due?

The prepayments are due by law on 15.02., 15.05., 15.08. and 15.11. of each year. Anyone who misses these dates risks additional late-payment surcharges.

What happens if the return is filed late?

If the trade tax return is filed late, the tax office may impose late-filing surcharges. Filing on time or contacting the tax office early is therefore generally advisable.

Who sets the multiplier?

The municipality concerned sets the multiplier; together with the trade tax base amount, it determines the amount of the actual trade tax and therefore varies by location. Comparing the multipliers of different municipalities is worthwhile, particularly when choosing the company headquarters.

Source: § 19 · § 25 GewStG. This article is general information and does not replace legal advice in an individual case. As of: July 2026.