A free business transfer basically leads to the fictitious abandonment of the business activity (§ 16 paragraph 3 EStG) and thus triggers a taxation of existing hidden reserves. Since the legislature has recognized the problem especially within family associations, § 6 (3) EStG was created. The standard specifies the conditions under which a business transfer to book values is possible, which is taxable on the ground.

Inheritances and gifts take place without exception and thus in all cases in the private assets of the taxpayer. This also applies mutatis mutandis to the transfer of complete assets or assets which are in such a transfer. A donation leads accordingly to the fictitious removal, is then carried out in private assets and the transferee puts the economic asset back into (his) operating assets.

The disadvantage is obvious. The (compulsory) withdrawal, for example in the case of inheritance, leads to the discovery of the hidden reserves, since it must be taken into account with its common value as revenue (§§ 4 (1) sentence 2 and 6 (1) sentence 1 number 4 EStG). On the other hand, since only the previous book value has to be derecognised in profit and thus in a manner that reduces profits, existing hidden reserves are subject to up to 45% income tax when transferring business.

The background is simply the intention of the legislator to be able to tax hidden reserves at the latest when abandoning the company or share of the company. Taxation should therefore not take place – in order to follow this will – precisely if the takeover of the company continues this. This is where § 6 paragraph 3 EStG comes into play.

In order to keep the transfer and subsequent continuation of a company also tax attractive, § 6 (3) EStG provides for a certain “special treatment” of business transfers. This shall include: