Abstract: Tax perceptions are well-known to determine the economic behavior of individuals. While there is broad evidence on significant tax-related misperceptions, however, little is known on firms’ tax-related misperception. We quantify firms’ tax-related misperception using survey data of 657 German firms. Further, we identify drivers of firms’ tax-related misperception. Our results indicate that firms considerably misperceive their average tax rate (ATR) and marginal tax rate (MTR). Respondents from all kinds of firms such as sole proprietorships, partnerships, and corporations overestimate their ATR, however, corporations to a significantly lower extent. By contrast, our findings on MTRs are inconclusive. Surprisingly, comparing firms’ perception of ATRs with MTRs reveals a missing understanding of basic tax concepts. According to our results, size, legal form, and estimates of tax complexity and tax compliance cost are the main drivers of tax burden misperception.