With Quality First GmbH, Felix Schulz has built up a company with a valuation of more than one billion euros – founded in 2017 and sold part of his shares in May 2022. Publicly he speaks openly about more than 30

Million € paid exit tax, his move to Cyprus and a second residence in South Africa.

In an interview, he presented the figures, the structure and his motivations in an astonishingly transparent manner. We classify the key statements in tax law – and show why the timing of his departure until the end of 2021 was decisive.

“The most famous tax consultant in Germany” – Felix Schulz

In the interview, Felix Schulz describes why tax cases fascinate him beyond his actual business: It is intellectually appealing for him, “solving a bit of a puzzle and finding tricks”. Remarkable: Schulz emphasizes that he had “never made a tax declaration” in his life and had only been involved in the big decisions – the operative tax structuring was up to his father and the consultants. Exactly this division of labor – entrepreneurial energy on the one hand, well-founded taxation on the other – is the red thread of its history.

The starting position: 17.4% interest in a billion-dollar company

Felix Schulz held around 17.4% (rounded 18%) in the company. With a valuation of more than one billion euros, this corresponds to a calculated share value in the range of around 150 to 180 million euros. In the tax sense, the shareholding was well above the 1% threshold of § 17 EStG – thus it was a “substantial shareholding” and fell within the scope of the exit taxation.

The tax core of any removal planning: According to § 6 AStG, anyone who holds shares in a limited company of at least 1% and moves his residence abroad triggers a fictitious capital gain – i.e. a taxation of the hidden reserves without actually being sold. This burden often affects the taxpayer without receiving liquid funds (so-called “dry income”). We have prepared the exit taxation according to § 6 AStG in detail.

30 million € Exit tax: This is how the evaluation came about

Schulz claims to have paid an exit tax of over €30 million – at a tax rate of around 28%. From this, the underlying valuation of his share can be recalculated: a common value in the range of about 100 to 120 million euros.

From a tax point of view, the cut-off date principle is decisive: the share is evaluated at the time of the departure (end of 2021/2022) with all information available at that cut-off date. Schulz describes that the tax office wanted more money afterwards, because it was foreseeable that the company would become worth more. This argument must be clearly contradicted from a tax point of view: findings that arise after the deadline are irrelevant for the assessment. Otherwise, as Schulz aptly notes, “everyone at the tax office would be billionaires because they invested early in Apple.” The valuation of shares at the departure date is regularly the central point of contention with the financial administration and should be supported by a reliable valuation report.

The decisive lever: moving away according to old legal situation (until the end of 2021)

The smartest move was timing. Schulz has emigrated after the legal situation until the end of 2021. This old version of § 6 AStG offered a huge advantage when moving to EU/EEA countries: an interest-free, unlimited deferral of the exit tax without security – until the shares were actually sold.

In concrete terms, this meant that Schulz could have “lived 100 years” without having to pay the tax as long as he did not sell. If sold later at a lower price, the tax would have been waived proportionally. If he had instead under the new legal situation from the 1. If the EU had to emigrate on 1 January 2022, the deferral would only have been possible in seven equal annual installments – a considerable liquidity and interest rate disadvantage. This is precisely why Schulz stresses that he had “done it now” because he knew that he did not want to live permanently in Germany.

Why Cyprus and not Dubai?

Cyprus was no coincidence. Schulz cites two reasons: Firstly, Cyprus as an EU member state was a prerequisite for the comfortable deferral arrangement under old law. Secondly, the lifestyle fit – less “hardcore luxury competition” than in Dubai, but peace, breadth and legal certainty within the EU.

In terms of taxation, Cyprus is attractive for such constellations because of its non-dominated status: as a “non-domiciled resident”, dividends and certain capital gains remain virtually tax-free for several years. This is where the reinvestment structure started.

The combination Cyprus + South Africa

Schulz holds a second residence in South Africa alongside Cyprus. In fiscal terms, Cyprus was the anchor for the deferral; South Africa complements for quality of life reasons (South Africa is attractive “if Europe is not beautiful”). Merely moving abroad to South Africa (third country) would not have enabled the EU deferral advantages in the same way under previous legal situation – the EU residence in Cyprus was the tax linchpin.

The sale and the clever reinvestment structure

In May 2022, Schulz sold part of his shares. With the actual sale, the deferred removal tax on the original valuation (about € 120 million) became due – but the increase in value remained tax-free because it was subject to Cypriot taxation.

Typical with such an exit: The buyer requires that the founder reinvest part of the proceeds (at Schulz around half). What matters is how you reinvest. Schulz describes a structure through a holding company in Luxembourg, held by him as a private person resident in Cyprus. The double taxation agreement assigns the right of taxation for capital gains and dividends to the country of residence – that is, Cyprus – and Cyprus levies 0% on it. Germany no longer has the right to tax in this constellation. If Schulz had reinvested directly in German society, however, the situation would have been more complex. Such international holding structures are highly dependent on individual cases and must properly address the additional taxation and anti-treatment shopping rules (§ 50d para 3 EStG).

The honest attitude: “Let’s do everything right”

What is remarkable is Wolf’s basic attitude: On the advice of his father, everything was done correctly – “I want to be able to sleep quietly.” Saving taxes is not a reprehensible thing, as long as it is done within the law. This line coincides with our consulting philosophy: design yes, but legally compliant, documented and capable of defending against the tax office. Schulz also points out that the operating company in Germany continues to pay around 30% tax (corporate and business tax) – Tax optimization at the private level does not mean that nothing flows to the Treasury.

What entrepreneurs can learn from the Felix Schulz case

The case shows exemplary what is important in a move with significant participation:

Structuring reinvestment: The right holding structure decides whether future profits remain tax-free.

Timing is everything: legislative changes (such as the abolition of the permanent EU deferral from 2022) can decide on millions of euros.

Defend valuation at the cut-off date: later performance developments are irrelevant – a robust report protects against further demands.

Choose EU destination country carefully: Legal certainty, DTA location and local benefits (non-dom) must fit together.