Annex G of the Tax Return: Purpose and Tips

In Annex G, you declare only your profit; the calculation is carried out elsewhere. You determine the profit either using the EUER form or a balance sheet. Annex G has a summary character; in addition, the tax office requires various specific pieces of information. Many business owners enter only their profit in this annex; other sections are not relevant to them.

If you generate revenue from a trade, the tax office requires you to submit Annex G.

Among others, the following groups of people are required to submit Annex G:

• Merchants
• Hotel and restaurant operators
• Owners of industrial and craft businesses
• Owners of service businesses, provided they are not working as freelancers
• Participants in commercial partnerships
• Landlords of holiday accommodation who operate similarly to a hospitality establishment
• Co-owners of corporations in respect of disposal gains

This form consists of four sections:

• Profit
• Additional information for the tax reduction under § 35 EStG
• Disposal gain (before deducting any tax-free allowances)
• Miscellaneous

The following provides a brief introduction to each of these four sections.

As a trader, you can generate profits in various ways. If you are active as a sole proprietor, enter your profit in line 4. Do you operate a further trade? Use line 6 for this. Many business owners alternatively hold participations in partnerships such as OHGs and KGs: enter your profit shares in line 8.

In addition, this section contains further fields on a range of topics. In line 16, for example, indicate whether you wish to claim a tax concession under § 34a EStG. You may apply for this concession in respect of profits that you retain within the business.

The state reduces income tax where traders remit local trade tax. The tax office requires additional information in order to calculate this tax reduction precisely. This includes in particular the trade tax assessment amount (Gewerbesteuermessbetrag) and the actual trade tax payable. If you operate several businesses, you must list this data separately for each.

In this section, you record any disposal gains: these may arise from the sale of your business or upon ceasing to trade. The sale of business interests is also accounted for in this part of Annex G of the tax return.

In addition, you must enter the sale of shares in corporations such as Aktiengesellschaften and GmbHs in the relevant fields, provided you own or have owned at least 1% of the company's assets. The gains on the shares disposed of expressly do not fall under the flat-rate withholding tax (Abgeltungssteuer); the tax office calculates income tax on these.

The final section contains various items of information on different types of income and expenditure. Enter here, for example, profits from commercial livestock farming and commercial futures trading, as well as interest expenditure under § 4h EStG.

If you engage Guhr Steuerberatung to handle all tax aspects of your trade, we also take care of Annex G. Our services also include the preparation of the cash-basis income statement or balance sheet: experienced tax advisers calculate your profit meticulously and use the available options — for example on depreciation — to your advantage!

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