In order to avoid high tax burdens in the sale of assets, § 6b EStG makes it possible, under certain conditions, to place an arising profit in a § 6b reserve and thus avoid taxation for the time being. Within the investment period of four years or six years, the profit must be used for the investment of a new asset. If no investment is made within the time limit, the reserve must be dissolved to increase profits. But can a § 6b reserve be transferred to another company before the acquisition/production of a reinvestment good? And what happens to the § 6b reserve on the last day of the reinvestment period, if the company is merged to another on the same day? It was precisely these questions that the jurisprudence addressed last year.

The parents of the plaintiff were owners of an agricultural holding and were also involved as limited partners in a limited partnership. In the 2005/2006 marketing year, the plaintiff’s parents made a profit on land sales in their company, for which they formed a reserve under § 6b EStG. On 30 December 2006, the parents transferred the agricultural holding to the plaintiff free of charge. In the special balance sheet on 31.12.06 of the limited partnership they recorded the reserve and deducted it in the following year from the production costs of a building completed in 2007 and registered as special operating assets.

The tax office did not recognize the reserve according to § 6b EStG in the special balance sheet of the parents, however. The transfer of the reserve in the year before the completion of the reinvestment goods is not permitted under the income tax guidelines. Thus, the reserve remained in the plaintiff’s business and was dissolved in the 2009/2010 marketing year in a profit-increasing manner. FG Münster, on the other hand, considered the transfer of the reserve to be legal even before completion of the reinvestment material.

1.2. Decision

Contrary to the decision of the FG Münster, BFH decided that the transfer of the § 6b reserve without immediate deduction from the acquisition costs of a reinvestment good is not permitted. BFH added that the § 6b reserve could only be formed and dissolved in the company in which the profit in question was realised. In the balance sheet of the reinvesting holding, the transfer of the reserve can always only have an effect in the form of a reduction in the acquisition costs.

BFH of 22.11.2018 – VI R 50/16

The plaintiff is the universal successor of B-GmbH. The B-GmbH balance sheet after a marketing year deviating from the calendar year (01.07.-30.06.). On 30 June 2007, B-GmbH entered the profit from a real estate sale into a reserve pursuant to § 6b EStG. In February 2012, B-GmbH was merged retroactively to the plaintiff on 1 July 2011. The merger was based on the annual accounts of B-GmbH as of 30 June 2011 as the final balance sheet of the transferring legal entity. B-GmbH did not undertake a profit-increasing dissolution of § 6b reserve because it assumed that the reserve had been transferred to the plaintiff by merger. On the other hand, the tax office dissolved the reserve in the tax balance sheet at B-GmbH on 30.06.2011 in a profit-increasing manner and also made a profit surcharge of 24%.

2.2. Legal basis

according to § 6b para. 3 EStG a § 6b reserve is to be dissolved at the end of the fourth marketing year following its formation in a profit-increasing manner, if it still exists at that time.

Decision 2.3.

FG Münster did not follow the tax office and granted the complaint in full. In the opinion of the FG Münster, a reserve under § 6b EStG will also be transferred to the legal successor if the conversion date and dissolution date are identical if the reserve is not transferred. The opinion of the tax office that the transfer of assets to the plaintiff due to the merger took place only a logical second after the end of the B-GmbH marketing year did not follow FG Münster. There is no legal basis for this. Nor is there a chronological order from the fact that the tax balance is the technical basis for the conversion balance. Thus, in the opinion of FG Münster, the tax office unjustly dissolved the § 6b reserve to increase profits and also wrongly set a profit surcharge.

Due to the fundamental importance of the case, however, the Finanzgericht allowed the revision. The procedure is pending at the BFH under the ace: XI R 39/18.

2.4. Update

The opinion of the Finanzgericht Münster was rejected by the Finanzgericht Berlin-Brandenburg in its judgment of 5 March 2019 (6 K 6071/18). According to the Finanzgericht Berlin-Brandenburg, a § 6b reserve whose reinvestment period expired on the balance sheet date cannot be shown in the final balance sheet of the transferring company. The reserve must thus be dissolved in the company being transferred and taxed by it.

Two different financial courts with two different views. Legal certainty will therefore only come from the decision of the BFH (XI R 39/18).

FG Münster, judgment of 17.09.2018 – 13 K 2082/15 K, G