According to the Association of German chambers of industry and commerce (DIHK) and the association of the German retail trade (HDE), the corporate tax reform has had serious effects on the German retail trade business. All in all, due to new trade tax regulations, the burdens on trade businesses have increased. This is true irrespective of the legal form of companies, criticise both above-mentioned associations.
The main reason for the above is that rental and lease fees or leasing rates for business offices partly count as trade earnings leading to higher trade taxes. This fact was confirmed by a joint survey conducted by the DIHK and HDE among 800 businesses.
»Particularly affected by higher taxes are specialist retail traders in downtown areas and local businesses in residential areas. Numerous businesses have to bear tax charges totalling more than 60%», said Mr. Stefan Genth who is managing director with HDE.
In many cases the tax burdens threaten the very existence of companies. This applies to both thriving retail trade businesses and in particular to those which are already faced with difficulties. Warns Mr. Gent: »In these cases the tax burden will increase losses even further and lead to the bancruptcy of these businesses.«
Says Mr. Martin Wansleben who is managing director of the IHK: »We had a look at 250 businesses and 87% of these companies have to bear a higher tax charge after the tax reform.« The examples mentioned are not only typical for downtown trade businesses, but in the end hotels and restaurants could be affected as well.
Mr Wansleben estimates that tax burdens have increased for at leat 250.000 small and medium-sized entities. This could not be the intention of lawmakers. From a fiscal point of view there is no need to hold on to structural shortcomings given that tax revenues have exceeded the amounts planned beforehand by 60 billion Euros.
The associations call on the grand coalition to keep in mind the advantage of all enterprises and to carry out the necessary corrections as soon as in the Tax Amendment Act 2008. 