If you have registered a business, you are considered a trader and therefore are obliged to pay the Gewerbesteuer.A municipal tax, the Gewerbesteuer, is considered one of the most important sources of income for municipalities in Germany. You are paying it directly to the local district, instead of the tax office. The responsible authority is the Gewerbeamt (trade office) or Ordnungsamt (regulatory office) where your company is based.Some good news: If yours is a younger and smaller company, you can take advantage of a uniform tax allowance for Gewerbesteuer. Einzelunternehmen (sole proprietorships) and Personengesellschaften (partnerships) are entitled to a Gewerbesteuer allowance of €24,500 per year. What that means is, if your annual profit is below this amount, you’ll be covered by the allowance.If your profit is above this number, the allowance is deducted from the total profit and you pay only the amount which exceeds the allowance.Corporations are not entitled to the allowance regardless of the amount of their profit.