Christoph Freichel: German Profit Taxes

Christoph Freichel, Gernot Brähler,

Christian Lösel, Andreas Krenzin

6 thEdition

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The German income tax law is subject to permanent changes and due to the high pace of reform, the legislator often makes manual mistakes or that regulations are particularly complex. The textbook, which has already been published in its sixth German edition, has now been translated into English language.

This textbook provides beginners with a comprehensive overview of fundamental aspects of income tax law. After an introduction to income tax law, income tax ( Chapter 2 ) is analysed as a focal point. This includes the characterisation, meaning and principles of income tax, personal and impersonal tax liability as well as the temporal allocation of income. This chapter focuses on the explanations relating to the determination of taxable income and the income tax to be determined. Subsequently, the principles of corporate income tax ( Chapter 3 ) and trade tax ( Chapter 4 ) are presented. However, the explanations are not limited to the respective basic principles, but also relate to questions of tax liability, the determination of taxable income or the business profit. Finally, numerous examples are also used to illustrate how these types of taxes are actually assessed. Chapter 5 is devoted to the approaches of the legislator for the implementation of a legal form neutrality of taxation in Germany. The explanations in this textbook on income tax, corporate income tax and trade tax are supplemented by a so-called comprehensive case study in which the interrelationships of the determination of taxable income or business profit, the respective provisions that may be necessary and the calculation of the relevant tax liabilities are shown, taking into account the special features mentioned in the case.

For the sixth edition, the entire book was revised and updated in order to adapt it to the current state of knowledge and legal status. In order to meet the didactic requirements, the book contains numerous practical examples as well as illustrative figures and tables. At the end of each chapter there is a summary in the form of core statements on key findings, questions and individual references to literature, which are suitable for in-depth, topic-specific literature study. The comprehensive index helps you to search for concrete content.

The book is the ideal companion for the targeted preparation for examinations in the Bachelor's and Master's programmes at universities that are oriented towards business taxation or tax law. It is also ideally suited for self-study. Target groups are therefore students, lecturers in the field of business taxation and tax law. The book is also suitable for English-speaking practitioners (including those from abroad) who wish to develop basic knowledge of German Profit taxes useful for everyday professional life. Assistants in tax consulting, tax clerks as well as landlords specializing in tax and not least also tax advisers are addressed here.

We would like to thank especially Christoph Freichel’s partners Mr. WP StB Dr Matthias Ritzi and Mr. WP StB Matthias Rohr from Moore Treuhand Kurpfalz GmbH Wirtschaftsprüfungsgesellschaft, Steuerberatungsgesellschaft, Mannheim, for the financial support of this book and Mr. Dr Jürgen Schechler from UKV Verlag for the pleasant cooperation. We would like to express our gratitude to our academic staff and student assistants, who have supported us tirelessly and conscientiously in the preparation of the manuscript. In alphabetical order: Ms. Sophie Marie Lorinser, B.A., Ms. RA Dipl.-Finw. Katrin Michels, Mr. Felix Schmitt, B.A. and Ms. Lena-Marie Waller, B.A.

We are grateful for any suggestions for improvement, spelling mistakes or suggestions and would like to refer you to the following e-mail addresses:

christoph.freichel@htwsaar.de, gernot.braehler@gmx.de, christian.loesel@ingolstadt.de info@kastl-krenzin.de.

The book is based on the legal status 01.01.2018

Christoph Freichel Gernot Brähler Christian Lösel Andreas Krenzin

In addition to this textbook, a web service is available for download on the title page of the book at www.uvk.digital/9783739830247

1.A clearly structured presentation of the illustrations of the book.

2.Additional examples and understanding questions, which support the didactical usability of the presentation by the lecturer in instruction and for the student in the self-study are very useful.

Preface

List of abbreviations

1Introduction to German profit tax law

1.1The importance of taxes

1.2Tax burden and tax justice

1.3The three tax disciplines

1.4The tax system

1.4.1Earnings of the state

1.4.1.1Taxes

1.4.1.2Fees

1.4.1.3Contributions

1.4.1.4Special levies

1.4.2Classification of the tax types

1.4.3Taxation terminology

1.4.3.1Taxpayer and/or taxable subject

1.4.3.2Subject of taxation and/or taxable object

1.4.3.3Tax base

1.4.3.4Tax threshold, tax allowance, deductible amount

1.4.3.5Tax rate and tax scale

1.4.4Tax sovereignty

2Personal income tax

2.1Basic principles of personal income tax

2.1.1Characterization, importance and principles of personal income tax

2.1.1.1Legal basis

2.1.1.2Characteristics and demarcation of the personal income tax

2.1.1.3Fiscal and economic importance

2.1.1.4Principles of income taxation

2.1.1.5The two forms of income tax assement

2.1.2Personal and impersonal liability for personal income tax

2.1.3Personal liability for personal income tax

2.1.3.1Types of unlimited tax liability

2.1.3.2Types of limited tax liability

2.1.3.3Problem of double taxation

2.1.4Impersonal liability for personal income tax

2.1.4.1The types of income

2.1.4.2Determination of the personal income tax

2.1.4.3Classification of earnings and expenses

2.1.5Temporal assignment

2.1.5.1Assessment period and determination period

2.1.5.2Fiscal year

2.2Determination of taxable income

2.2.1Determination of income

2.2.1.1Overview of the methods of determining income