The business tax is a local tax that local businesses have to pay depending on their profit. The trade tax is not levied by the federal government, but by the municipalities and is regarded as their most important source of income. In addition to the trade tax law there is a trade tax implementing ordinance and trade tax guidelines for administration and tax office . Trade tax The entrepreneur is taxable for his domestic business enterprise. Freelancers and self-employed people who do not do business, on the other hand, pay no trade tax. For partnerships and for natural persons there are free allowance. Only for profits beyond this is trade tax due. In particular, smaller companies like craftsmen should be less burdened. For the business enterprises organized as a corporation, this limit does not apply. Corporations are already subject to trade tax due to their legal form and also have to pay trade tax on their entire profits. Amount of trade tax The calculation of the business tax is not easy and depending on the municipality, the final trade tax is different. The basis is the profit generated in the commercial enterprise. This is determined according to income tax law or corporation tax law.