Unlike open-ended, hidden profit distributions (vGA) from a corporation take place without a corresponding distribution resolution of the shareholders. Since they must not affect the income, they are added back off-balance sheet. We show you what to consider here and how to recognize hidden profit distributions and avoid them in time!
Although the Corporate Income Tax Act (KStG) regulates the tax treatment of hidden profit distributions, it does not tell us when such a distribution even exists. In the first step, we learn that a hidden distribution of profits remains neutral for the profit determination of the corporation (§ 8 (3) sentence 2 KStG). Conversely, this means that you add the vGA with its mean value off-balance sheet if it has previously had a profit-reducing effect.
In order for a hidden profit distribution to exist at all, a corporation must
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.