Disguised distributions of profits, or vGA for short, sometimes pose a considerable risk in the relationship between corporations and their shareholders. A lack of customary nature leads to the refusal of the operating expense deduction of the GmbH and at the same time to the recognition of capital income at the level of the shareholder. However, a vGA can only be “induced by the company relationship” if there is also a so-called willingness to provide. Without a willingness to donate, there is a lack of a hidden profit distribution, as the Bundesfinanzhof (BFH) has decided in judgment of 22.11.2023.
1st principle: hidden distribution of profits in case of inappropriate donation
A hidden profit distribution occurs according to R 8.5 paragraph 1 KStR whenever a corporation
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.