According to a comprehensive Germany-wide study carried out by the Ifo Institute for Economic Research on behalf of the Foundation for Family Businesses, family businesses bear a significant proportion of the total tax burden. The study revealed that the tax burden of the 500 largest family businesses in Germany is considerably higher than that of comparable non-family businesses.
On behalf of the Foundation for Family Businesses, the ifo Institute for Economic Research compared the tax burden of the 500 largest family businesses in Germany with that of non-family-owned companies listed on the DAX. The researchers estimate in absolute terms that the 500 largest family businesses paid an average of €12 billion per year in domestic income tax revenue between 2010 and 2018. The domestic corporate tax payments of the DAX-27 companies averaged €100 million less than those made by the TOP 500.
Moreover, large family businesses are subject to higher effective tax rates. The average effective tax rate of the 500 largest German family businesses already amounts to around 28 percent at the corporate level. Allowing for taxes at the shareholder level (income tax paid by members of partnerships and the withholding tax on dividends paid by public limited companies) results in a tax burden of nearly 38 percent. By contrast, when factoring in taxes paid by shareholders, income from DAX companies that are not family businesses is subject to a tax rate of only around 26 percent.