After the transfer of the sole proprietorship to a corporation has taken place, the legislator sets a blocking period of 7 years. The blocking period is intended to avoid an immediate departure of the shareholder or transfer of the registered office of the company abroad after successful (tax-neutral) transfer and thus prevent tax evasion or tax avoidance. A breach of the blocking period is regarded as a retroactive event and leads to an ex post tax assessment by abolishing all or part of the tax neutrality.
The personal application requirements i.S.d. § 1 para. 4 UmwStG for the contributor and the transferee must be available at the tax transfer date. If the transferee was founded in the course of the transfer and the transfer pursuant to § 20 para. 5 and 6 UmwStG for tax purposes refer back to a transfer date which is before the establishment, the personal application requirements are to be fulfilled at the time of the establishment's effectiveness. [] 93
2 Elimination of personal requirements
In addition, the personal application requirements by the submitter within the seven-year blocking period of § 22 para. 1 S. 1 UmwStG. If the contributor loses his tax connection point in the EU/EEA area within the seven-year blocking period – e.g. due to removal, transfer of registered office or change of the relevant DTA – the personal requirements according to § 22 para. 1 S. 6 No. 6 UmwStG for the retroactive taxation of the transfer profit according to § 22 Abs. 1 S. 1 UmwStG (profit I).[94]
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.