accounting items | Amount

Profit of the GmbH | EUR 30,000

15% corporate tax | EUR 4,500

15% business tax | EUR 4,500

Remaining for distribution (§ 8 (3) sentence 1 KStG) | EUR 21,000

accounting items | Amount

Profit of the GmbH | EUR 50,000

(EUR 100,000 minus EUR 50,000 salary payment)

15% corporate tax | EUR 7,500

15% business tax | EUR 7,500

Remaining for distribution (§ 8 (3) sentence 1 KStG) | EUR 35,000

Structure | Only GmbH | Holding (two GmbHs) | Sole proprietorship (private person)

Profit | EUR 100,000 | EUR 100,000 | EUR 100,000

Tax burden at company level | EUR 15,000 (operative and only GmbH) | EUR 15,000 (operative GmbH)

EUR 525 (holding) | None (free trade tax due to § 18 EStG)

Tax burden on a private level | EUR 11.343 (managing director salary) EUR 6.250 (profit distribution of EUR 25,000 with 25% capital gains tax) | EUR 11.343 (managing director salary, no profit distribution to private person) | EUR 33.750

(total profit is subject to income tax)

Tax burden (total) | EUR 32,593 | EUR 26.868 | EUR 33.750

Tax burden (percentage) | 32.59 % | 26.868% | 33.75 %

Structure | Only GmbH | Holding (two GmbHs) | Individual company (private person)

Profit | EUR 250,000 | EUR 250,000 | EUR 250,000

Tax burden at company level | EUR 60,000 | EUR 60,000 (operative GmbH)

EUR 2.100 (holding) | None (free trade tax due to § 18 EStG)

Tax burden at private level | EUR 11.343 (Managing Director salary) EUR 35,000 (25% on the profit distribution of EUR 140,000) | EUR 11.343 (Managing Director salary, no profit distribution to private person) | EUR 100.253.48 (total profit is subject to income tax)

Tax burden (total) | EUR 106.343 | EUR 73.443 | EUR 100.253

Tax burden (percentage) | 42.54 % | 29.38 % | 40.10 %

With a holding company, entrepreneurs benefit from various tax advantages, but above all from an overall lower tax burden. At which point these advantages actually come into effect, however, shows our holding calculation example. We compare the structure with the sole proprietorship, because with this legal form most self-employed begin. However, there are no tax-relevant differences to a partnership, so our statements apply accordingly.

A total of two corporations, such as GmbHs, UGs or AGs, are required to set up a holding structure. Foreign legal forms such as the English Limited or the Dutch B.V. are also suitable for the holding company. Finally, the structure is established by establishing both companies (simultaneously or consecutively) and then positioning the operating company under the holding company.

The operating company carries out the corresponding business. 100% of the shares belong to another GmbH, the Holding. In turn, the private person holds a 100 % stake in this holding. If the operating company now distributes profits, they end up in the “pot” of the holding company and are taxed particularly favorably here.

As our holding computational example later shows, the structure offers the following advantages in particular: