T1-GmbH: off-balance sheet income correction | + | 100.000
M-AG: Accounting income from investments | + | 100,000
off-balance sheet tax exemption § 8b para. 1 KStG | – | 100,000
5% flat rate §8b para. 5 KStG | + | 5000
T2-GmbH: Yield from activation of the hidden deposit | + | 100,000
st. exemption of this income according to § 8 para. 3 S. 3 KStG | – | 100,000
Total result | + | 105.000
T1-GmbH: off-balance sheet income correction | + | 100.000
M-AG: Accounting income from investments | + | 100,000
off-balance sheet tax exemption § 8b para. 1 KStG | – | 100,000
5% package §8b para. 5 KStG | + | 5000
Participation expense on T2-GmbH | – | 100.000
T2-GmbH: no correction, since no hidden deposit | 0
Total result | + | 5000
GmbH shareholders are exposed daily to the risk of hidden profit distribution (vGA). In addition, the financial administration excessively often assumes a hidden profit distribution. Therefore, this article shows the exact requirements and legal consequences using legislation and examples. It also presents the tax assessment of the relationship between a parent company and its subsidiaries or sister companies.
This seminar paper is based on the investigation of tax issues of a hidden profit distribution (vGA) between sister companies. For this purpose, the term hidden profit distribution is first explained and the most important factual characteristics are analyzed in detail. There is still no legal definition of the term. § 8 Abs. 3 sentence 2 Corporate Tax Act (KStG) has only a clarifying character.
As already indicated, the main focus of the present work is on the elaboration of the hidden profit distribution between sister companies. A special consideration is given to the use cases of the hidden distribution of profits in the form of a transfer of an asset and the mere transfer of use. A distinction is made between a parent company as a capital and partnership. In addition, two examples serve to clarify the tax effects on the overall result of the companies concerned.
At the end of the work, in addition to a summary of the facts, tax arrangements are shown which are intended to prevent the risk of unexpected occurrence of a hidden profit distribution between sister companies.
A legal definition of hidden profit distribution is non-existent. § 8 Abs. 3 sentence 2 KStG has only a clarifying character:
Even hidden distributions of profits and distributions of any kind on profit participation rights, with which the right to participate in the profit and liquidation proceeds of the corporation is associated, do not reduce income. [1]
The term hidden profit distribution has been developed by the BFH jurisprudence and is also applied by the tax administration in the sense of R 8 KStR.
A hidden profit distribution exists if
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.