By carrying out a company tax reform Germany moved one step ahead. This is underlined by an analysis by the Institute for the German Economy (IW) in Cologne. According to this analysis, the average tax rate for a company which makes optimal use of depreciation regulations fell from 36.0 to 28.9% as a consequence of the tax reform.
This enables Germany to move into the middle field internationally in terms of tax rates. Even though the average tax rate in Germany is still much higher than e.g. in Ireland (11.9%) or Austria (21.6%), it is on the other hand significantly lower than in Japan (40.9%) or in the US state of New York (48.4%).
German stock companies benefited particularly from the fact that German fiscal authorities are relatively moderate with regard to real estate tax. Furthermore, German profit tax rates have become quite competitive by now. According to the IW´s experts, however, a major flaw of the reform are stricter profit calculation regulations. Among other things they critizise that the degressive depreciation method was abolished. 