If you want to split a GmbH with two or more subsidiaries and bring it into a holding company, you have a choice in the order. Either you split the GmbH first and then bring the companies into the newly founded holding company. Or you first bring the GmbH into the holding company and then split the subsidiary. In the end, the result of the company structure looks identical. However, the two routes still have different tax effects. That is why we now describe why blocking periods in conversion tax law are tax detrimental in the former case and this has no direct tax consequences in the latter case.
There are many oddities in the world of tax law. Whether it is a property tax, which has existed since time immemorial, but in fact no longer applies, bridges for which customs duty is levied, with this income tax-free, or islands that maintain their own tax laws. This time we introduce you to another curiosity and explain how best to solve it.
This involves a GmbH consisting of two subsidiaries. Subsidiaries are organizational units within a company that are characterized by their structural autonomy. Therefore, it is no wonder that you can easily spin off subsidiaries from a GmbH in order to turn them into independent companies. That is what we intend to do. The two subsidiaries are to be transformed into their own GmbH. In addition, however, we also want a holding company to be superior to the two GmbHs in the end.
Now you can make one GmbH by splitting two GmbHs. And by contribution you transfer a GmbH to a holding company by way of a tax-neutral share exchange. The question we are now discussing is which of the two transformations should be initiated first. Is it more sensible to split the GmbH first and then transfer the two GmbHs to the holding company? Or is it better to first bring the GmbH into the holding company and carry out the division in a second step? Although at first glance the result is the same in both cases, tax risks lurk on the way there, namely blocking periods.
When it comes to the conversion of a company, two legal areas are decisive. On the one hand, you have to follow the rules of the conversion law. It contains civil law provisions. However, because company conversions can also have tax consequences, there is the conversion tax law. This is therefore particularly important for our considerations. And since we have already mentioned the terms division, submission and blocking period, we also specify in this section the norms that define them:
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.