Statistics and Analysis Translated from German with AI assistance

Municipal Business Tax Rates

Business tax has become a silent brake on location development, as shown by the survey on municipal rates 2026 conducted by the German Chamber of Commerce and Industry (DIHK). The rising burdens on businesses are also due to the strained financial situation of many municipalities. The DIHK calls for structural reforms and adjustments to tax legislation.

For the 2026 DIHK Municipal Rate Survey, municipal business tax rate data from 706 cities and towns with at least 20,000 inhabitants were gathered and compared to data from the end of 2025. The population-weighted national average increased from 439 to 441 per cent. 613 municipalities maintained their rates, 88 raised them, and 5 lowered them.

Key Findings at a Glance

The regional taxation disparities remain significant. The assessment rates range from 250 percent in Monheim am Rhein and Leverkusen to 580 percent in Oberhausen and Mülheim an der Ruhr, resulting in a range of 330 points.
North Rhine-Westphalia continues to have the highest trade tax burden among the federal states, with a population-weighted average of 476 percent. Of the 214 municipalities analysed in the state, 40 increased their assessment rates.
The highest assessment rates continue to be predominantly levied in North Rhine-Westphalia. Leading municipalities are Oberhausen and Mülheim an der Ruhr at 580 percent each, followed by Erftstadt at 565 percent, Elsdorf at 555 percent, and Kerpen at 550 percent. The largest individual increases were in Hückelhoven with 53 points, Kerpen with 50 points, and both Dülmen and Rees with 44 points. In Brandenburg, Königs Wusterhausen raised its rate by 45 points.
The sharpest rise in the population-weighted state average was observed in Saxony-Anhalt, where the value increased by five points from 422 to 427 percent. This was followed by Hesse with four points and Baden-Württemberg with three points.
One-third of the examined municipalities levy an assessment rate of less than 400 percent. At the same time, 217 municipalities or 30.7 percent of the surveyed communities have rates of at least 450 percent. High assessment rates are often concentrated in densely populated cities.

Impact on Investments and Competitiveness

Helena Melnikov in braunem Blazer gestikuliert

"Out of every 18 municipalities increasing their business tax rate, only one reduces it," comments DIHK Chief Executive Helena Melnikov on the results of the 2026 DIHK Municipal Rate Survey. "This makes business taxes a silent brake on location competitiveness. The tax burden on businesses continues to rise. While most cities maintain constant rates, out of the 706 municipalities surveyed, 88 raised rates, and only five lowered them. The population-weighted national average rose from 439 to 441 per cent."

Do Not Pass Municipal Financial Problems to Businesses

According to the DIHK, this trend mainly reflects the strained financial situation of many municipalities. Rising social expenditures, higher personnel and material costs, extensive investment needs, and an increasing maintenance backlog are met with tight financial leeway. The municipal financing deficit stood at over 31 billion euros in 2025. "Municipal financial problems are real. But they must not be shifted onto local businesses. Higher business taxes weaken economic development and jeopardise the municipal tax base in the long run," warns Melnikov.

"Germany is already one of the high-tax countries, especially for businesses. Further rate increases exacerbate the competitive disadvantage, draining companies' resources for investments, innovation, digitalisation, decarbonisation and jobs," says Melnikov. Medium-sized companies are particularly affected: "SMEs finance investments largely from their own profits and can hardly respond flexibly to additional burdens. For many family businesses, the local tax rate determines whether the next machine is purchased or whether the next apprentice is hired. High rates signal conditions that increasingly influence investment and location decisions."

Provide Adequate and Sustainable Support for Municipalities

Melnikov calls for structural reforms: "The federal and state governments must provide municipalities with adequate and sustainable resources. New tasks should only be assigned with secured funding. At the same time, existing tasks and standards should be reviewed. Efficiency reserves must be utilised, and public investments clearly prioritised," says the DIHK Chief Executive. Short-term relief can help but cannot replace reforms to bring municipal expenditures, tasks, and revenues into lasting balance. "The agreement of the federal, state, and local governments to adhere more closely to the principle of financial equivalence for new tasks from October is an important step in the right direction. However, it does not solve the structural problems with existing tasks and their financing."

Melnikov emphasises that the tax legislator must also act: "The credit factor for business tax on income tax should be increased. Where municipal rates exceed 422 per cent, the neutral credit on the corporate level no longer fully applies. This places additional burdens on partnerships."

The Numbers for Download

Download: Zeitreihe Gewerbesteuer-Hebesätze (Stand 2026)

Information: File format: PDF (accessible)
File size: 85 KB
Status of: October 2026
Page count: 1 pages

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(only available in German)