Q&A: CCI Membership
1. Who is a member of the CCI Berlin?
Membership of the Chamber of Commerce and Industry is regulated by the IHKG (Provisional Regulation of the Chambers of Commerce and Industry Act).
Under Article 2 IHKG, all companies which have their headquarters or a permanent branch in Berlin and which are also liable for trade tax are members of CCI Berlin. In other words, any enterprise which is in principle subject to trade tax is a member. Whether a company actually has to pay trade tax is irrelevant. Enterprises with branches in different districts belong to each CCI.
An application form need not be completed to become a member. It is not possible to withdraw from the Chamber of Commerce or to quit the membership.
Craft businesses are not members of the CCI. Instead, they belong to the Chamber of Arts and Crafts.
2. When does the obligation to pay contributions start?
For sole entrepreneur and partnerships, membership of the CCI starts with the beginning of the commercial activities. For corporations and cooperatives, membership starts as soon as the company has been listed in the Register of Companies or the Register of Cooperatives.
3. How high will our contributions be?
Contributions can be calculated with the contribution calculator here.
4. How are contributions calculated?
Contributions are set annually by the General Assembly in the Financial Statutes. The obligation to pay contributions begins with the start of the financial year (Section 3(1) an 3(2) Contribution Rules. The basic contribution is an annual contribution. According to our Contribution Rules it cannot be split up. Even if your enterprise will not be a member of CCI Berlin for the whole year, the annual contribution must be paid in full.
You will usually receive a demand for payment once a year. The amount specified is to be paid within one month of receipt. If payment is not made on time, dunning and enforcement proceedings will be initiated and you will have to pay the resulting additional costs.
5. How ist the level of contributions decided?
Companies do not all pay the same amount; instead, the level of contributions depends on how financially successful they are. Contributions are calculated based on their trading income (alternative profits from industrial and commercial operations) as transmitted to us by the tax authorities. The financial figures we receive from the tax authorities are binding and we may not correct them.
6. What is a provisional contribution assessment?
Since your actual operating result for the current year is presently unknown, Section 15(3) of our Contribution Rules provides for a provisional assessment for the current year based on the last known income or profit or based on an estimate in accordance with Section 162 AO (German Fiscal Code).
When you receive an advance payment notice, we can adjust the basis of assessment on request. This is a good idea if for example your earnings are likely to be lower than in the previous year. Requests for adjustment must be accompanied by, say, a copy of your current trade tax demand or a recent management analysis.
In this case, the submission of an objection is not necessary.
7. How are contributions made up?
Contributions consist of two components: the basic contribution and in some cases an additional levy. The basic contribution is staggered according to your trading income/profit. The level of basic contributions is decided annually by the General Assembly. The additional levy is also decided annually by the General Assembly in the Financial Statutes and is standardized for all enterprises.
8. How can I object and how much will it cost?
You can object against a contribution notification in writing or by minute (Niederschrift) at CCI Berlin within one month of receipt. Therefore, compare the instruction on right to appeal, which you can find at your demand for payment.
9. What can be done in the event of temporary cash flow problems?
CCI contributions must be paid within one month of receipt of the demand for payment. Since CCI contributions are public fees, they must be paid on time. However, if your company is in temporary financial difficulty, you can apply for payment to be deferred or accepted in instalments.
10. What special rules apply to pharmacies?
Pharmacies are commercial enterprises and thus members of the CCI. However, because pharmacy owners are also members of the Chamber of Pharmacists, special rules apply: their CCI contributions are based on a quarter of their trading income (i.e. their profits from industrial and commercial operations). If such enterprises are listed in the Register of Companies, they must always pay at least the minimum basic contribution of currently €80.
11. Do freelancers have to pay contributions?
Freelancers are not normally members of the CCI. Whether someone is classed as a freelancer or a trader is decided by the tax authorities. Tax returns for ‘genuine’ freelancers (e.g. doctors, lawyers, architects and artists) only make provision for “income from self-employment”. They are not subject to trade tax and therefore not members of the CCI.
However, if the work carried out has been classified by the tax authorities as liable for trade tax, or if freelancers also engage in trading activities alongside their freelance work, they are also a member of the CCI. In this case, their contributions are only calculated based on the income from their trading activities.
A special rule applies to corporations which exclusively or predominantly perform freelance work such as firms of auditors, tax consultants or lawyers. Once a limited liability company (GmbH) has been listed in the Register of Companies, it is also liable for trade tax under GewStG (the German Trade Tax Act), including if its activities are categorized as freelance work. Therefore, corporations made up of freelancers are also members of the CCI. However, in this case CCI contributions are calculated based on just one tenth of their trading income. This rule does not apply if a person works as a freelancer or has an interest in a corporation but also trades outside it.
12. Why may a craft business have to pay contributions to the CCI as well?
A firm is solely a member of the Chamber of Craft Trades if it exclusively engages in craft or similar activities.
Then again, companies often provide both craft and non-manual services. In such cases, they are members of both the CCI and the Chamber of Craft Trades (Section 2(3) IHKG). However, such mixed companies only have to pay contributions to the CCI if:
- The structure of the company has a commercial nature and size (i.e. it is usually listed in the Register of Companies) and
- The turnover of its non-manual division exceeds €130,000.
CCI contributions are calculated only based on the earnings of the non-manual division. The shares of earnings attributable to craft activities and non-manual work are determined by the Chamber of Arts and Crafts.
13. Do startups have to pay contributions immediately?
Under Section 3(3), clause 4 IHKG, startups do not pay any contributions to the CCI in their first two years. In the next two years, they pay basic contributions but not the additional levy. However, these both rules only apply as long as trading income (profit from industrial and commercial operations) does not exceed €25,000 and if you are an entrepreneur and not listed in the Register of Companies or the Register of Cooperatives.
In addition, this exemption does not apply if in the five years prior to startup you earned income from trading activities, agriculture, forestry or self-employment, or held over 10 per cent of a corporation.
Please note that this rule only applies to companies established since 2004.
14. What happens if shelf companies are sold?
Shelf companies that have not yet been sold or used for their intended purpose are also members of the CCI and have to pay contributions. The reason is that CCI membership depends solely on trade tax liability and not trading activity. If you buy a shelf company, ask the seller whether CCI contributions have been paid.
15. Are dormant companies liable to contributions?
Membership of CCI Berlin and hence the obligation to pay contributions only depends on a company’s trade tax liability, not on whether it is actually trading.
Under Section 2(2) GewStG, a limited liability company (GmbH) is always liable to trade tax until it has been deleted from the Register of Companies. Accordingly, it must still pay a basic contribution even if it is dormant, is being wound up, or has submitted notice that it has ceased trading. Membership of the CCI only ceases when the company has been deleted from the Register of Companies. Until such time, the company must also pay at least the minimum basic contribution.
16. What rules apply to atypical dormant sub-participations?
In an atypical dormant partnership, in contrast to a ‘normal’ dormant partnership, the dormant partner is involved not only in the profit and loss of the company but also the owner’s assets. An atypical dormant partnership is regarded as a partnership under Section 15 EStG (German Income Tax Act) and is therefore liable for trade tax and CCI contributions.
The atypical dormant partnership and the enterprise in which it holds an interest are therefore both members of the CCI and must pay contributions. Both demands for payment will be addressed to the enterprise.
Normally, if the atypical dormant partnership refers to the entire commercial business and the GmbH has no earnings of its own, the GmbH need only pay the basic contribution while the atypical dormant partnership has to pay the basic contribution and the additional levy.
However, if the tax authorities assess the annual trading income of an atypical dormant partnership to be below €5,200, your enterprise will not be charged the second contribution. Moreover, when calculating the additional levy for the atypical dormant partner, the allowance pursuant to Section 3(3) IHKG is to be subtracted from the basis of assessment.
17. What are the rules governing management and holding companies?
Pure holding companies are legal entities which have been established solely for the purpose of holding various interests in commercial enterprises. The object of these companies is to acquire and manage interests in other companies, investments and real estate. According to a ruling issued by the Münster Supreme Administrative Court (V.6.10.00 – 4 A 4668/00), pure holding companies’ legal status means that they are at least objectively subject to trade tax. The criteria for membership and the obligation to pay contributions are met.
18. What are the criteria for classification as a large company?
To ensure fair assessment for contributions, the General Assembly has decided that a distinction is to be drawn between large companies and small and medium-sized enterprises (SMEs).
Under the Budget Statutes, companies are classified as large if they meet at least two of the following three criteria:
- Balance sheet total exceeding €19.25 million
- Turnover exceeding €38.5 million
- More than 250 employees
In this case, the company has to be assessed to an increased basic contribution. In 2015, the basic annual contribution for large companies is €12,800.
If the calculated levy is €8,000 and higher, the company is classified with its contributions to the respective contribution scale. The basic contributions are set out in our Financial Statutes.
19. How are controlling companies and controlled companies assessed?
Controlled companies are also separate members of the CCI alongside their controlling company and therefore have to pay contributions even if the controlled companies have been deemed branches (Section 2(2), clause 2 GewStG) and are therefore not independent taxable entities for trade tax purposes.
The trading income is calculated separately for controlling companies and controlled companies, then added up and attributed to the controlling company. If the branches are located in different districts, trade tax is broken down accordingly.
Controlled companies are assessed for the basic contribution (Section 2(1) IHKG in conjunction with Section 2(1) Contribution Rules).
Controlling companies are assessed on the basis of their trading income and their share of trading income earned in Berlin for the additional levy and – if relevant – for the basic contribution. A basic contribution is only charged if the controlling company has its own permanent establishment in the district covered by CCI Berlin.
20. Are there differences in the way contributions are calculated for companies with a foreign legal form?
Membership of the CCI is governed by the IHKG. All businesses which have their headquarters or a branch in Berlin and are liable for trade tax are members of CCI Berlin, including if they have a foreign legal status.
21. When do members stop paying contributions?
Different rules apply depending on your type of business organization.
22. You require a certificate of the membership?
A membership certificate can be produced quickly and free of charge.
23. What should we do if we have ceased trading?
Entrepreneurs who have given up their businesses are legally required to log off their trade. Otherwise, it constitutes an administrative offence.
A business deregistration form can be downloaded from the website of the Berlin municipal law enforcement departments (Ordnungsämter). The Berlin law enforcement departments for each district are also listed here.
In addition to business registration and deregistration, you must also file any significant changes, for instance if you relocate within Berlin or your line of businesses changes.