Commercial infection is of great importance in practice. You are a freelancer and want to join together to form a GbR or partnership? Highest caution is advised here, because if a certain limit of commercial income is exceeded, the so-called “dyeing theory” applies. The commercial income infects the other income. For example, a commercial trade in medicines with doctors leads to the fact that the entire practice activity is to be regarded as a commercial enterprise and the profit generated is now subject to business tax. The following article gives you a brief overview of the current legal situation for the commercial infection of partnerships and its design possibilities.
In the video we explain the advantages & disadvantages of the commercial stamping of a classic GmbH & Co. KG and the possibilities of avoidance.
1st introduction
The commercial infection – also called “coating theory” – is mentioned in § 15 para. 3 No. 1 EStG regulated by law. This regulation stipulates when a partnership with its activity is fully regarded as a business if the company also has an activity within the meaning of § 15 para. 1 sentence 1 no. 1 EStG. The second alternative of § 15 para 3 no. 1 EStG, introduced by the JStG 2007[40], extends the norm to the effect that the legal consequence also occurs when the company receives revenue within the meaning of § 15 para. 1 sentence 1 no. 2 EStG.
2.
Requirement for § 15 Abs. 3 No 1 1. Alternative EStG is that a partnership carries out two distinctive activities, one of which must be classified as originally commercial. It must be ensured that the activities are not intertwined, since the company is to be classified as uniformly original commercially and § 15 para. 3 No. 1 EStG does not apply[41]. Due to this commercial activity, the partnership as a whole is regarded as a commercial enterprise – infection of non-commercial income, § 15 para. 3 No. 1 EStG. The second activity may be freelance § 18 EStG[42], agricultural and forestry § 13 EStG[43] or property management § 20, 21 EStG[44]. Even if only a part of the shareholders also earns commercial income, the infection by this activity affects all shareholders[45].
For the purposes of this paragraph, suitable partnerships are the open commercial company and the limited partnership, which are named in the standard, as well as the GbR, the atypical silent partnership, the sub-participation company and the partnership.
Requirement of § 15 para. 3 No. 1 2. Alternative EStG is the existence of revenue from § 15 para. 1 sentence 1 no. 2 EStG. Here, the income as a co-entrepreneur of another company is legally anchored as income from commercial enterprises. This means that the partnership is in turn a directly participating partner of a joint venture company and thus the partners of the partnership are indirectly involved in the joint venture company.
The scope of commercial activity, which leads to the infection of the other income of a partnership, remained controversial until 2014. In the BFH judgment of 27.08.2014[47], however, two limits were defined up to which a commercial activity is harmless for the further income. If the net annual turnover from commercial activities does not exceed:
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.