date | theme

07. November 2018 | Exit taxation the valuation of GmbH shares (this contribution)

10. November 2018 | Exit tax according to § 6 AStG: Remission & deferral in special cases

12. November 2018 | Exit taxation (§ 6 AStG) at GmbH shareholders

20. May 2019 | Exit taxation: calculation – deferral – waiver – avoidance

If a GmbH shareholder moves abroad, the exit taxation according to § 6 AStG is applied. The amount of the exit tax depends on the value of the share in the GmbH. A company valuation is therefore carried out for the calculation of the tax. For this purpose, the simplified income value method is usually used, which, like you, is presented in more detail below.

If the shareholder of a GmbH moves abroad, this often has major tax implications both for the taxpayer himself and for his GmbH. Because of the move, Germany loses the taxation right for a later capital gain of the GmbH. This means that if the taxpayer sells his GmbH after moving away, Germany may no longer tax. The taxation right is given to the state in which the GmbH shareholder is domiciled.

In order to avoid this tax disadvantage, the legislature has created the exit taxation according to § 6 AStG. In its legal consequence, the provision therefore assumes a fictitious sale of the share in the GmbH at the time of the departure. Germany subsequently taxed the sale as if it had actually taken place.

2nd Assessment of the GmbH – Simplified Income Value Procedure

The basis for calculating the notional capital gain is the so-called “common value” of the company at the time of departure, which is the market value of the company. In order to determine this, the tax office regularly uses the so-called "Simplified income value method".

This takes the profits of the last three marketing years before the valuation date as a basis for calculation and, after deduction of an appropriate entrepreneurial wage and shareholding income, forms the average annual income of the last years. This is then multiplied by the tax office by a capitalization factor. The calculated value represents the current value of the company at the time of the move.

Here you will find the calculation form of the tax office:

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If the tax office has made the assessment, it is possible to challenge this assessment by means of an objection or amendment. The following points offer the opportunity for skilled consultants to influence the company valuation in favor of the mandate.

3.1 Adequate entrepreneurial wage

If no company wage has yet been deducted in the tax profit, an appropriate entrepreneur wage is taken into account ex officio in the calculation of the tax office. The tax office assesses the appropriateness in most cases differently than the entrepreneur himself. So here a skillful argumentation of the consultant is required. A possible argument would be, for example, the salary of a manager in his own company. In principle, there is no argument against the fact that the managing director deserves three times as much as a normal manager. Such reference salaries of the own company are a strong argument against above the tax office. This can reduce the company valuation and also the exit taxation.

3.2 Change in considered years

Taxpayers and consultants should carefully check which years the tax office used for the valuation of the company and calculation of the exit taxation. Often the current calendar year is also included. This exception is possible in principle, but is subject to certain conditions. The inclusion of the current calendar year due to positive profit development is generally not sufficient for this.

3.3 Derivation of income value from sale to third parties

If a part of the GmbH has been sold to a third party, the value of the company can be derived from this for a period of one year. If the shareholder sells a GmbH share particularly favorably, the entire company is valued accordingly. To use this possibility, § 11 BewG must be carefully examined by the consultant. Depending on the price of the part sold, the regulation has a major impact on the level of exit taxation.

3.4. Further design models