You are here :Doing Business in GermanyIncome Types

Income Types

The German income tax law structures come in seven categories.

Income From Agriculture and Forestry

This income includes surplusses from utilisation of self-produced products from operations in agriculture, forestry, tree nurseries, vineyards and gardening, as well as operations that produce plants and plant parts using natural forces, pond farming, fish farming for lacustrian fishermen, apiculture, nomadic shepherds and seed breeding, income from hunting (if there is a contact with operations of agriculture and forestry), income from forest and forestry cooperatives and similar real communities, income from agricultural and forestry subsidiary operations.

Income from Business Enterprises

This includes income from commercial activities, such as:

  • Craftsmen
  • Manufacturing businesses
  • Wholesale and retail
  • Export and import companies
  • Service sectors

Income from Self-Employment

This income includes income from so-called freelance work. Such work must be performed by persons independently and under their own responsibility. The entrepreneur acts on his own risk. Typical freelance activities are:

  • Physicians
  • Lawyers
  • Tax consultants
  • Architects
  • Lecturers

Income from Employment

Income from employment is  income from  wages and salaries as well as other income and benefits for employment in private and public areas. Furthermore, such income includes pensions, widows and orphans pensions from earlier employments.

Income from Capital Assets

Income from capital assets comprises all remunerations from allocation of capital (money). Typical capital income includes:

  • Dividends
  • Interest from economisers
  • Discount revenues

Income from Rent and Lease

Income from rent and lease comprises surplusses from allocation of premises and buildings  and of properties, rights, etc.

Other Income

Other income includes certain income that is not defined in the other income types. This is not a collecting tank, since other income is defined precisely. Typical other income includes:

  • Pension payments from the statutory pension scheme
  • Repeated benefits
  • Private sales transactions