Trade Tax (Gewerbesteuer) for Creators in Germany 2026

As a self-employed creator in Germany you pay trade tax (Gewerbesteuer) only on trade income above an allowance of €24,500 a year (§ 11 GewStG). Of the excess, 3.5% is the trade tax base amount, which your city multiplies by its multiplier – 475% in Cologne in 2026. Four times the base amount is then credited against your income tax (§ 35 EStG), so in Cologne the real extra cost is 2.625% of the profit above €24,500.

Who pays trade tax as a creator

Trade tax is a municipal tax on the profit of a trade business (Gewerbebetrieb). Influencers, streamers, YouTubers and subscription creators run a trade in almost all cases, because advertising, affiliate links, platform payouts and sponsorships are commercial income (§ 15 EStG). If you registered a trade, assume you are in scope.

Freelancers under § 18 EStG – for example genuinely artistic or independent journalistic work – pay no trade tax. For creators that is the exception. Once advertising shapes your content, the tax office treats the activity as a trade.

Three points often surprise newcomers:

• Foreign platform income counts. German VAT may not apply to payouts from Ireland or the USA (see VAT for creators), but the money is part of your profit and therefore of your trade income.

• Your home is usually your business location. The multiplier of the municipality where you work applies. For a creator filming at home, that is your home town.

• The allowance is per business, not per person. A creator duo working as a partnership gets €24,500 once.

Trade tax values for 2026

Every municipality sets its own multiplier. You find it in the city's tax bylaw (Hebesatzsatzung) or on the website of its finance department. Cologne publishes a multi-year overview.

How trade tax is calculated

The calculation runs in five steps. The terms in brackets appear on your notices.

1. Profit: Start with your taxable profit from the cash-basis statement (EÜR). Trade tax itself must not reduce it.

2. Add-backs and deductions: Certain financing costs are added back to get the trade income (Gewerbeertrag).

3. Allowance: Round the trade income down to full €100 and deduct €24,500.

4. Base amount (Steuermessbetrag): Apply 3.5% to the rest.

5. Multiplier (Hebesatz): The city multiplies the base amount by its multiplier.

Add-backs: rarely relevant for creators

The add-back rules cover interest, a fifth of rents and leasing for movable assets such as camera gear, half of the rent for a studio or office, and a quarter of fees for time-limited licences (§ 8 Nr. 1 GewStG). They only apply if the total of these items exceeds €200,000 – and then only a quarter of the excess is added. Most solo creators stay far below this.

The credit against income tax

Sole traders and partners get a flat credit: their income tax is reduced by four times the base amount (§ 35 EStG). This leads to a simple rule of thumb:

• At a multiplier of 400%, the credit offsets the trade tax completely.

• Above 400%, the difference remains as a real cost. In Cologne that is 75 percentage points of the base amount (475% − 400%), equal to 2.625% of trade income above the allowance.

• Below 400%, the credit is capped at the trade tax actually paid. You gain nothing beyond that.

There are two further limits. First, the credit cannot exceed the share of income tax attributable to your trade income. If you also have a salary, the credit is calculated on your trade income's share of total positive income. Second, if your income tax is low – for example because of large deductible expenses or losses from other sources – part of the credit can be lost. An unused credit is neither refunded nor carried forward.

A GmbH (limited company) gets neither the €24,500 allowance nor the credit. That is one reason why a GmbH only pays off for creators at higher profits that stay in the company.

Worked example: four profit levels in Cologne

Example: a single creator lives and works in Cologne, has no other income and no add-backs. Profit equals taxable income for simplicity; health insurance contributions would lower the income tax in practice.

The extra cost is always 2.625% of trade income above the allowance: €15,500 × 2.625% = €406.88. In a municipality with a multiplier of exactly 400%, it would be zero in every column. No solidarity surcharge applies here, as income tax after the credit stays below €20,350 (§ 3 SolZG). You can try your own figures with the trade tax calculator (in German).

Returns, notices and prepayments

The trade tax return (Gewerbesteuererklärung) is submitted electronically via ELSTER together with your other annual returns. Two different authorities then send you two notices:

• The tax office (Finanzamt) sets the base amount in the Gewerbesteuermessbescheid.

• The city applies its multiplier, sends the Gewerbesteuerbescheid and sets prepayments.

If you think your profit is wrong, object to the tax office's notice, not the city's. The objection period is one month after receipt (§ 355 AO).

Prepayments are due quarterly on 15 February, 15 May, 15 August and 15 November. They are based on the last assessed trade tax. Each instalment is rounded down to full euros and only set if it reaches €50. If your profit drops, you can apply for lower prepayments. If it rises, the back payment often comes a year or two later. Build reserves; the year-two effect also hits your income tax prepayments, see taxes for content creators in Germany.

Special cases

• First year: The city sets prepayments based on the profit estimate in your tax registration questionnaire. A high estimate ties up cash, a low one leads to back payments. See registering as a self-employed creator.

• Moving during the year: If your business location moves to another municipality within a year, the base amount is split between the municipalities (§ 28 GewStG). Each applies its own multiplier.

• Low-tax municipalities: A registered address in a town with a low multiplier does not help if you actually work elsewhere. What counts is where your business location really is.

• Creator duos: A partnership (GbR) gets the €24,500 allowance once. The credit is then split between the partners according to the profit-sharing ratio.

• Losses: A negative trade income can be carried forward to later years (§ 10a GewStG).

• GmbH: Trade tax from the first euro, no credit. Whether a GmbH is still cheaper overall depends on corporate tax, salary and dividends; see GmbH for content creators (in German).

• Freelance parts: If part of your work is genuinely artistic or journalistic, it may be freelance. If it cannot be clearly separated from the advertising business, the whole activity is usually treated as a trade.

Common mistakes

• Using the old factor of 3.8: Until 2019 the credit was 3.8 times the base amount. Since 2020 it is four times. Old calculators underestimate the relief.

• Deducting trade tax as an expense: Trade tax does not reduce your profit. Planning with it as an expense underestimates your income tax.

• Thinking foreign income is exempt: No VAT on a platform payout does not mean no trade tax.

• Taking the full credit for granted: Losses from other sources or low income tax can reduce it, but the trade tax is still due in full.

• Not adjusting prepayments: After a strong year prepayments rise automatically. If income drops, you keep paying the high amount unless you apply.

• Using the wrong multiplier: The business location counts, not where you are registered.

• Choosing a GmbH because of trade tax alone: A GmbH pays more trade tax. Whether it is cheaper overall needs a full calculation.