A GmbH can acquire its own shares from its shareholders. The shareholder sells his shares to the GmbH (acquisitioner). The GmbH must then account for these shares as “own shares”. In addition, it is also possible for the GmbH to collect the shares from the affected shareholders (collection of shares). Taxing, both scenarios are treated almost the same. In 2009, accounting under HGB was newly regulated by BilMoG. Since 2013, this has also been confirmed by a BMF letter (BMF letter of 27 November 2013).

In principle, any corporation can acquire and hold its own shares. In practice, however, this occurs almost exclusively with public limited companies. In the following, the commercial accounting of these own shares before and after the introduction of the Balance Sheet Modernization Act (BilMoG) will be the focus before the accounting is discussed. In this context, the changed requirements of the BMF letter of 27 November 2013 are of particular interest. Finally, there is a brief explanation of the tax treatment of the sale of the shares of the limited company to the same from the point of view of BilMoG.

The term “own shares” means the own shares or shares repurchased by a corporation. “Own shares are not entitled to vote, dividend or liquidation proceeds (§ 71b AktG with analogous validity for the GmbH)” (Hoffmann/Lüdenbach, Kommentar Bilanzierung, 2010, § 272, paragraph 43). Pursuant to § 71 AktG and § 33 GmbHG, German corporations are permitted to purchase their own shares only under certain conditions, for example in order to prevent serious damage from the company or to compensate a shareholder. However, we do not present the other conditions under which the purchase of own shares or shares is possible at this point.

Reasons for buying or holding own shares can be the risk of hostile takeover, the desired issue of these shares to employees for participation in the company's success or measures in the course maintenance of own shares to compensate for price peaks. The dividend payable to shareholders can also be regulated by the holding of own shares.

In principle, all shares held in a corporation are to be classified under subscribed capital in the balance of trade. The company’s liability towards creditors is limited to the amount of the subscribed capital (§ 272 (1) sentence 1 HGB). The subscribed capital of a public limited company is its share capital as defined in the Articles of Association, which according to § 6 AktG must be denominated in euros and must amount to at least EUR 50,000 (§ 7 AktG). A characteristic feature of the legal form of a public limited company is that the share capital is divided into shares and the establishment of the company takes place only when all shares are taken over by the founders of the company (§ 29 AktG). A share is a security that securitises an ownership interest in the associated company.

Accounting for the subscribed capital shall be carried out with the nominal amount of the shares. The nominal amount of a share, which is also noted on it, is determined by dividing the share capital by the number of issued shares and must amount to at least one euro in accordance with § 8 (2) AktG.

2.2. Own shares of a GmbH in balance sheet tax law

In accordance with the principle of the relevance of the trade balance for the tax balance (§ 5 (1) sentence 1 EStG), own shares acquired by a corporation are also to be shown in the tax balance. Divergent rules for accounting are not found in the tax laws. In terms of amount, own shares, since these are shareholdings, are to be recognised by tax law according to § 6 (1) no. 2 EStG with the acquisition costs in the tax balance sheet.

According to the provisions of the Income Tax Act, a taxable and taxable capital gain or loss arises on the sale of an interest in a corporation. The allocation of this fact to the corresponding types of income has changed in the years under consideration. The shareholder had to tax his profit from the sale both before the introduction of BilMoG and afterwards.

Summary and Recommendation for Action

After some uncertainties regarding the accounting for own shares of corporations in both the commercial and tax balance sheets, clarity was first created by the introduction of the BilMoG and the accompanying alignment of the accounting requirements for own shares to IFRS and later by the BMF letter of 27 November 2013. Shares held by a corporation in itself cannot be capitalized under commercial or tax law. Instead, you have to deduct own shares of the GmbH as a negative item from the subscribed capital. The purchase of own shares is therefore treated as a capital reduction and the resale of the same shares as a capital increase. In this way, the legislator has approximated the actual intention of the companies to take such a measure.

By offsetting the amounts exceeding the nominal amount of the own GmbH shares with the tax deposit account and the distributable profit, the share buy-back by the corporation offers itself as a tax design for the generation of later payments of tax-free dividends to the shareholders. However, it should be noted that the participation of the affected shareholder is reduced. At the same time, however, the participation relationship between the shareholders also changes.

The shareholder did not, however, change. For example, a sale or purchase of shares in the company continues to constitute normal acquisition or disposal transactions. Tax law treats them according to the general principles of income tax law. In this case, no other approach is applicable or impractical, especially for shares of listed companies.