The purchase of a GmbH is basically possible in three different ways: as a private person, by share deal and by asset deal. The three models differ considerably in relation to the subsequent taxation of the acquiring entrepreneur. As we would like to show in our article on the basis of three exemplary model calculations, the tax burden is highest when buying as a private person. Significantly less taxes are incurred when buying via share deal. However, the buyer of the GmbH can achieve the greatest tax advantage with an asset deal. However, whether a share deal or an asset deal is used in the GmbH purchase depends primarily on the agreement of the buyer with the seller.

Before we deal in detail with the three models for the purchase of a GmbH, we go into the characteristics that characterize them. After all, this is also the reason why they ultimately differ so much from one tax point of view. We would also like to say a few introductory words about the common prerequisites of the three vanguard models. In this way, we lay the basis for the comparability of the models shown.

To anticipate it right away: the model of the purchase by a private person serves here only as a comparison object in order to prove the potential in the saving of taxes through a share deal or an asset deal. Only then do the advantages of the final comparison between the share deal and the asset deal become very clear.

Three models to buy a GmbH

2.1. Purchase of a GmbH by a private person

The organizationally easiest way to buy a GmbH is by a private person. It is so simple because it requires no further preparation. The negotiations with the seller can also be very straightforward in this way: You simply agree on a suitable purchase price without having to pay attention to further details. So in principle, this is what is referred to in Anglo-Saxon jargon as a share deal, which can be translated into German with share purchase.

2.2 Share deal by a Holding GmbH with subsequent merger

In this model, before the purchase of the GmbH, a holding company in the form of its own GmbH by the buyer takes place via share deal. This Holding GmbH then appears as the buyer of the GmbH. After the acquisition of the GmbH, which now functions as a subsidiary of the holding company, a merger with the parent company is carried out, which means the termination of the existence of one of the two companies. The resulting GmbH then assumes all claims and liabilities of the companies being transferred within the framework of a universal succession.

2.3. asset deal

The asset deal represents the purchase of a GmbH by acquiring the individual assets. For this purpose, the buyer establishes his own GmbH before the purchase, which then acquires the assets in its own name and on its own account as the actual acquirer. The seller, on the other hand, remains after the sale of all assets with a substanceless company, which can then be liquidated.

The most important common feature of the three models to be compared when buying a GmbH is the purchase price. We assume a purchase price of EUR 1,000,000.

3.2. Yield

Of course, the buyer expects a return from his investment. We want to assume an annual profit equivalent to a 20% return. So for simplification, we assume an annual constant profit before tax of EUR 200,000.

3.3 Taking out a loan

In order to finance the purchase of the GmbH, we assume that the entire purchase price is to be financed by borrowing a bank loan. So the bank loan is also EUR 1,000,000, whereby we waive the influence of any Agios or Disagios.

3.4 Interest on the loan

Regardless of the model under consideration, we assume that the loan will be remunerated at an interest rate of 6%. For the sake of simplicity, we leave the actual repayment out of interest and instead assume a uniform interest payment over the repayment period.

Repayment of the loan

Speaking of repayment rate: We want to set the repayment as high as possible. As a result of the influences of the different taxation, there are then very different annual repayment rates, which therefore also means very different durations in the repayment of the loan. So the faster the repayment of the loan, the better. The repayment rate is thus a yardstick for the tax advantage of the respective model.

3.6 Taxation of profit

Of course, our contribution is primarily about taxing the profit of the GmbH to be acquired. To this end, we must first look at corporation tax and business tax. While corporation tax is collected uniformly throughout Germany, trade tax can sometimes differ significantly depending on the location of the GmbH, because the levy rates for trade tax are determined by the respective municipalities themselves. We are simply assuming an average tax of 15% corporation tax and business tax each.

In the case of trade tax, we also waive the addition of interest. This simplification of our calculation models does not affect the comparability of the results.

Furthermore, the owner of the GmbH has to tax the profit distribution to him by capital gains tax. This is uniformly 25%. All other taxes in connection with the GmbH, such as the property tax, remain out of the question in order to simplify our models.

Private purchase, share deal and asset deal in comparison

4.1. The private purchase of a GmbH

4.1.1. Explanatory notes for determining the repayment rate

After the purchase of the GmbH by our hypothetical private person, the expected first annual profit distribution comes to them. This will then be used 100% to repay the loan, as we stated in the introduction. However, shares of the profit distribution must first be reserved for taxes and interest.

In the case of taxation, corporation tax and business tax must first be determined and paid. They amount to EUR 30,000 each, which corresponds to a tax burden on the part of the GmbH of EUR 60,000. The original profit thus remains EUR 140,000, which will be distributed to the private person. This involves taxation under the capital gains tax at a rate of 25 %. The tax deduction is therefore EUR 35,000. Our private investor thus receives only EUR 105,000 from the GmbH profit. After deducting the interest of EUR 60,000, only EUR 45,000 remains to repay the loan. At this fixed annual repayment rate, the bank will therefore have to wait a little more than 22 years until full repayment.

Share deal with subsequent merger: the debt push-down model

4.2.1 Establishment of a Holding GmbH

As already stated in the introduction, the seller and buyer of this model agree on a share deal with which the GmbH is to be sold. In addition, the buyer sets up a Holding GmbH in advance for this purpose. In fact, this Holding GmbH is both the borrower and the acquirer of the GmbH.

The completion of the acquisition of the GmbH by Holding GmbH establishes a parent-subsidiary relationship between these two companies. However, this should only be of short duration, because ultimately they should merge with each other, so that only one GmbH remains. Whether an upward merger or downward merger is more favorable depends on the individual circumstances, which we want to leave out of consideration here.

At this point we turn your attention to the fact that the merger now leaves the loan taken out by the holding company with the resulting GmbH. Thus, one achieves that the acquired GmbH to a certain extent pays its own purchase price. Thus, the English-language term for this debt push-down model is easily explained: The acquisition costs are passed on to the acquired GmbH.

4.2.3. Taxation of profits

Let’s get to the win. This is subject to corporate tax and business tax. However, because the GmbH bears the interest expense of the loan, it is possible to use the interest profit-reducing in the calculation of taxes. In our example, we have to expect EUR 60,000 interest. From the original profit of EUR 200,000, only EUR 140,000 is subjected to taxation with corporate tax and business tax, which together require a deduction of EUR 42,000. In order to effect the repayment of the loan as quickly as possible, we waive a distribution of profits to the GmbH shareholder. This saves us the capital gains tax that would otherwise be incurred.

Incidentally, the depreciation of the assets and the goodwill of the acquired GmbH follows the pattern already established before the sale. The reason for this is that the merger following the share deal is only possible as universal succession. This requires a continuation of all rights and obligations of the predecessor companies. An approach with the acquisition costs in the share deal is therefore excluded.

4.2.4. Determination of the period of repayment

After deduction of taxes and interest, an amount of EUR 98,000 remains from the annual profit, which is now used for repayment. This enables us to repay the loan within a little more than 10 years.

4.3. The GmbH purchase by asset deal

4.3.1. Depreciation of costs

The asset deal also requires the establishment of a GmbH as preparation for the purchase of the GmbH in question. Let’s just call this new foundation Kaufer-GmbH and the GmbH Aufkauf-GmbH to be bought. Unlike the private purchase or the share deal, the asset deal only acquires the assets of Aufkauf-GmbH from Kaufer-GmbH. The acquisition costs are of course more than the actual value of the economic goods. After all, the seller also wants to set the company value of his GmbH in the sale. This has the consequence that the depreciation of the acquisition costs is divided between the assets and the goodwill resulting from the balance. While the assets have to be settled over a different depreciation period depending on the type, the goodwill is depreciated over 15 years. For simplification, we assume a uniform depreciation of the total acquisition costs over 15 years. This therefore corresponds to an annual amortisation of EUR 66.667.

4.3.2. Taxation of profits

In order to determine the taxable annual profit of the GmbH, we first have to deduct the depreciation and the interest expense. In our example, we deduct EUR 60,000 in interest and EUR 66,667 in depreciation. This leaves a taxable profit of EUR 73,333, of which EUR 22,000 is attributable to corporation tax and business tax. So that the repayment of the loan is completed in the shortest possible time, we also refrain from a profit distribution to the GmbH shareholder in this model.

4.3.3. Repayment of the loan

In total, we arrive at the following annual repayment amount: From the EUR 200,000 profit before tax, we deduct EUR 22,000 in corporate and business tax as well as EUR 60,000 in interest and then have EUR 118,000 available for repayment. At this repayment rate, it hardly takes more than eight and a half years for the loan to be paid off.

Share-Deal and Asset-Deal in Direct Comparison

In our final analysis, of course, the first is the enormous tax advantage enjoyed by both share deal and asset deal compared to the private purchase of the GmbH. At second glance, a tax advantage of the asset deal compared to the share deal is also apparent. This is even true, although we do not mention the advantage of a lower interest burden due to the higher repayment.

However, you must also note that in the context of the sales negotiations with the seller, it is always important whether you can successfully represent your own position. Since the share deal is particularly attractive for the seller of the GmbH for tax reasons, it may well happen that the buyer ultimately waives the asset deal that is more advantageous for him. It may also be possible for him to reduce the purchase price through negotiation, so that the negotiating partners involved achieve the best result for them.