assets | liabilities
Lower capital A EUR 250,000 | Lower value EU A EUR 250,000
assets | liabilities
Lower capital A EUR 270,000 | Lower value EU A EUR 250,000
Inferior car A EUR 20,000
The conversion tax law (UmwStG) regulates the tax treatment of conversion operations according to the conversion law (UmwG). Practically relevant here is in particular the contribution to a partnership, for example of entire companies, subsidiaries and shareholders. Shareholders benefit from tax voting rights here – so let’s take a look at § 24 UmwStG!
Individual and co-entrepreneurs have the opportunity to contribute their (proportionate) operating assets to a partnership. This is often done in connection with the establishment of a GbR, OHG or GmbH & Co. KG, whereby the sole proprietorship is regarded here as a contribution of the respective shareholder. Such a contribution to the partnership basically triggers a fictitious operational task or sale according to § 16 EStG. Tax result: A comprehensive taxation of all existing hidden reserves!
Thus § 16 paragraph 1 or 3 EStG is the proverbial “point of stick” for individual entrepreneurs. In order to make a contribution nevertheless attractive, the legislature has created a “lex specialis” to the EStG with § 24 UmwStG. The standard enables owners of an entire business, a branch of business and a share of the company to transfer this business assets to a partnership in a tax-neutral manner as a material group.
According to § 24 (1) UmwStG applies:
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.