Germany’s corporate trade tax burden reached levels never before seen this year, according to an analysis conducted by the German Chambers of Industry and Commerce (DIHK), reported by “Welt am Sonntag”. The study surveyed 706 cities and municipalities with more than 20,000 inhabitants, revealing that 88 of them increased their tax rate, while only five managed to decrease it. This trend has accelerated compared to the previous year; for 2025, 64 communities plan to raise the rate and four plan to lower it. Overall, the national average tax rate increased by two points, rising to 441 points.
Helena Melnikov, Chief Executive Officer of the DIHK, commented to the newspaper that trade tax is developing into a “silent brake on location competitiveness.” She noted that Germany is already classified as having high tax levels. Further increases in the tax rate intensify the competitive disadvantage, potentially diverting essential investment funds away from businesses. Among the surveyed municipalities, nearly 18 were raising their trade tax for every one that lowered it. The tax rates currently span a wide range, from 250 percentage points in Monheim am Rhein and Leverkusen, up to 580 percentage points in Oberhausen and Mülheim an der Ruhr, representing a difference of 330 tax points.
Melnikov called for municipalities and cities to receive better financial support. She stressed that both the federal government and the states must provide communities with adequate resources based on their responsibilities, stating that new tasks should only be transferred if fully funded. While the planned agreement among the federal government, states, and municipalities to adhere more closely to a “who orders, pays” principle for new duties starting in October was viewed as a positive step, the DIHK CEO cautioned that this does not solve the systemic issues regarding the financing and management of existing tasks.
According to the DIHK’s analysis, the ten municipalities with the highest tax rates are exclusively located in North Rhine-Westphalia. This state, the most populous in Germany, again recorded the highest workload, with a population-weighted average of 476 percentage points-an increase of two points from the previous year. The strongest increase was observed in Saxony-Anhalt, where the rate climbed five percentage points, from 422 to 427. Following closely were Hesse, which rose by four points, and Baden-Württemberg, which saw a three-point increase. Meanwhile, Brandenburg registered the lowest average tax rate at 387 percentage points.
