No automatic reduction to reduce advance payments of minimum corporation tax from 2024

With the Start-Up Promotion Act, the minimum corporation tax for the GmbH was also reduced to EUR 125.00 per calendar quarter or set for the FlexCo. Irrespective of this, the tax authorities issue advance corporation tax payment notices that still refer to the previously applicable minimum corporation tax of EUR 437.50 per quarter. A reduction of the advance corporation tax requires an application for reduction in each individual case.

Domestic corporations with unlimited tax liability and comparable foreign corporations must pay a minimum corporation tax (minimum corporation tax) of 5 per cent of a quarter of the statutory minimum amount of share capital for each full calendar quarter in accordance with Section 24 (4) KStG. The advance payment is determined by means of an advance payment notice.

Before the Start-Up Promotion Act came into force, the minimum corporation tax for GmbHs was therefore generally EUR 1,750 per year, i.e. EUR 437.50 per quarter.

With the Start-Up Promotion Act and its validity from 1 January 2024, the statutory minimum capital of the GmbH was reduced from EUR 35,000 to EUR 10,000, which consequently also reduces the annual minimum corporation tax for the GmbH to EUR 500 per year or EUR 125 per calendar quarter. The new level of minimum corporation tax also applies to the newly created flexible corporation (FlexCo), for which a statutory minimum capital of EUR 10,000 is also stipulated.

The tax authorities are currently still prescribing advance corporation tax payments for 2024, which are still based on the old (higher) minimum corporation tax. In some cases, however, the new (reduced) minimum corporation tax is already being imposed.

In the event that the old (higher) minimum corporation tax is imposed, there is no legal basis for an official or retroactive automatic change to the advance payment notice, according to information from the Federal Ministry of Finance (BMF), which was unfortunately only recently published. There is therefore no automatic reduction in relation to the 2024 advance payments.

Application for reduction of advance payments 2024

In this case, however, it is possible to apply for a reduction of the advance corporation tax payments in 2024 by means of an individual application for reduction, so that this also corresponds to the minimum corporation tax applicable since 1 January 2024. This will prove useful in cases where the GmbH’s expected income in 2024 does not exceed EUR 2,174.

The experts at WZP will be happy to assist you with this.