German municipalities collected a record €76.4 billion in business taxes in 2025, but receipts rose in only 11 states. Five states reported declines, leaving the national gain modest.
Collections fell in 2020, the first year of the COVID-19 pandemic, then reached successive records from 2021 through 2025.
In 2025, German municipalities took in €76.4 billion in business taxes. Receipts rose in 11 states and fell in five, a split that the national record alone can obscure.
The figures matter because municipalities set local business tax rates, which help determine how much they collect. But the nationwide increase does not show whether a town's tax base expanded or businesses earned more. Local rate decisions may also have played a role, and the data do not separate those effects.
A record with a narrow gain
Business tax revenue rose 1.5% from 2024, according to Germany's Federal Statistical Office. The €76.4 billion total was the highest in a data series that began in 1991. After the 2020 decline, receipts set new records each year from 2021 through 2024.
Across the local taxes grouped under the German term Realsteuern, municipalities collected about €92.5 billion. That total covers business tax and property taxes, and was up 1.3% year over year. Business taxes made up most of the reported revenue. Property-tax categories together contributed €16.1 billion.
These figures describe German municipal taxes, not U.S. local-government finances. The tax systems and local rate-setting rules differ, so the totals are not a like-for-like comparison with American property or business taxes.
States moved in opposite directions
Schleswig-Holstein and Saarland recorded the largest increases, each up 13.0%. Hamburg followed with an 11.1% gain. Receipts fell 12.0% in Bremen and 7.2% in Baden-Württemberg. Saxony was down 6.9%, while Brandenburg fell 6.8% and Rhineland-Palatinate dropped 4.7%.
The gap between the strongest gains and steepest declines shows why a record national total cannot describe conditions in every municipality. The statistics track changes in collections but do not identify the local causes behind each state's result. A state's percentage change also says nothing by itself about the amount of tax revenue collected there.
That is a different measure from the household-investment question examined in this Treasury yield analysis: municipal figures track tax receipts, not returns available to investors.
Property taxes were uneven
Property-tax collections were essentially flat at €16.1 billion. That total masks different results across the categories. Grundsteuer A, levied on agricultural and forestry businesses, fell 19.6% to €0.3 billion. Grundsteuer B applies to property outside agriculture and forestry; it rose 0.7% to €15.8 billion.
Grundsteuer C lets municipalities tax undeveloped plots that are ready for construction. It generated just €5.8 million in 2025. The figure suggests few municipalities used the option or collected substantial revenue from it, but it does not show how many adopted the tax.
Business taxes drove the increase in total local tax receipts. The largest property-tax category edged up only 0.7%, while the levy on agricultural and forestry businesses fell sharply. Revenue from the undeveloped-land tax remained small.
Local rates shape collections
Municipalities set the assessment rates, or Hebesätze, used to calculate business and property taxes. The average business-tax rate across municipalities was 410% in 2025, one percentage point above the prior year. Hamburg had the highest rate, while Brandenburg had the lowest, according to the Federal Statistical Office.
The average rate for Grundsteuer A rose by 15 percentage points to 377%. These are averages, not uniform rates: local authorities set their own levels. The data do not quantify how much of the nationwide revenue change came from rate changes rather than shifts in taxable business activity.
A tax rate and the amount collected are related, but they measure different things. A higher assessment rate can affect revenue; collections also depend on the tax base. For business taxes, the record total alone does not establish that every municipality or company had stronger results.
