Sale price | 30.000,00 €

less on transfer for a fee

Costs attributable

€30,000/€215,000 (= 13.95%) from €25,000 | €3,487.50

Capital gain | 26.512.50 €

of which 60 % is taxable according to the partial income procedure § 3 no. 40 letter c, § 3c EStG | 15.907.50 €

less on transfer for payment

waived allowance § 17 paragraph 3 EStG

30,000 €/215,000 € (= 13.95%) from 9,060 € | 1,264 €

Capital gain | 14.643.50 €

Sale price | 30.000,00 €

less on transfer for payment

Costs attributable

30,000 €/275,948 € (= 10.87%) from 25,000 € | 2,717.90 €

Capital gain | 27.282,10 €

of which taxable 60 %

Partial income proceedings § 3 no. 40 letter. c, § 3c EStG | 16.369,26 €

less on transfer for payment

waived allowance § 17 para. 3 EStG

30,000 €/275.948 € (= 10.87%) from 9,060 € | 984.97 €

capital gain to be recognised | 15.384.29 €

Anyone who sells a GmbH share and has held more than 1 % of the company within the last five years generates income according to § 17 EStG with the profit. The acquisition costs (e.g. share capital) are to be deducted from the sales price achieved. In the end, there is a profit or a loss. However, certain exceptions apply to the partial transfer of a GmbH share, as BFH recently had to decide again.

In cases of a partial transfer of shares of GmbH, the business is split into a paid and a free part.

First principle: Sale of shares in GmbH as a commercial income type

The Income Tax Act finally regulates commercial income in sections 15 to 17. While § 15 EStG applies to current income, §§ 16 and 17 EStG record certain profits from sales and duties. With § 17 EStG, the law contains a lex specialis on § 20(2)(1) EStG, since the sale of shares in corporations leads in certain cases to commercial instead of capital income.

Anyone who sells a share in a corporation (e.g. a GmbH) and has held at least 1 % or more of the share capital in the last five years generates income according to § 17 (1) and (2) EStG in the amount of the capital gain. The resulting profit is taxable according to § 3 no. 40 letter c EStG in the amount of 60 % with the personal tax rate. These principles apply in addition to the full and also in the case of a partial payment transfer of GmbH shares.

2nd exception: partial sale of shares in GmbH

When § 17 EStG was introduced, the legislature assumed the rule of a full-time sale of GmbH shares among third parties. In the case of such a sale at the common value of the shareholding, the acquisition costs are also deductible in full. The formula of § 17 (2) sentence 1 EStG, according to which additional divestment costs still incurred must be taken into account, therefore applies without exceptions.

But what applies to a partial sale of the GmbH shares, especially in cases of a mixed donation? If the sale price is lower than the common value of the shares and there are indications of a reduced sale, especially among relatives, the sale must be divided into two parts. In the case of the partial sale of a GmbH share, § 17 EStG then applies only with regard to the part for payment.

Let us take a look at the recently decided BFH case of such a partial sale (judgment of 12.12.2023, IX R 15/23).

2.1. Initial case: Low-cost sale of shares in a GmbH

The plaintiff was 100 % involved in a limited liability company he founded, more precisely a GmbH. After dividing the business into two shares of EUR 12,750 and EUR 12,250 each, he sold the newly created shares to his son and his wife. A total sale price of EUR 30,000 was agreed.

In the notarial purchase agreement, the participants stated an uncontroversially determined market value of the GmbH shares in the amount of EUR 215,000. This resulted in a partial payment transfer of the GmbH shares, as they were sold in the value of EUR 215,000 for only EUR 30,000.

However, the plaintiff was not aware of this and stated in his income tax return a profit in the amount of EUR 0 (EUR 30,000 – EUR 25,000 x 60% less allowance according to § 17 (3) EStG). The tax office deviated from this calculation and determined the profit attributable to the partial transfer of the GmbH share as follows:

The plaintiff filed the income tax notice. Unlike the tax office, it was not the strict, but the modified separation theory to be applied (BFH, judgment of 21.06.2012, IV R 1/08). The reason for this is that the book value of the operating assets does not exceed the remuneration and therefore no profit recovery is possible. The case-law on § 6(5), third sentence, EStG was thus to be applied accordingly to cases under § 17 EStG.

2.2. Disposal by the tax office

After the tax office informed the plaintiff that the application of the modified separation theory was cancelled, he did not withdraw his objection. Subsequently, there was a decline because the plaintiff had recalculated the common value of the GmbH shares using the simplified income value procedure and the tax office took over this value as – contrary to the notary’s contract – correct:

The Finance Court joined this calculation. There was a partial transfer of the shares of the GmbH, whereby the common value of the shares was correctly determined according to the simplified income method. The plaintiff went into appeal.

2.3. decision of the BFH: partial payment transfer of a GmbH share leads to division

Even before the BFH he had no success. The partial transfer of shares of GmbH led to a division of the entire divestment business. The reason for this is that abuse – for example by a “reciprocal sale” of the shares among relatives or spouses, should be prevented. The interested parties would otherwise have the opportunity to produce tax-relevant losses without an actual economic burden, for example in the amount of EUR 24.999 if sold at a price of EUR 1,00 (BFH, judgment of 17.07.1980, IV R 15/76).

The divestment business therefore had to be divided into a paid part and a free part, as the Finance Court correctly ruled. Insofar as the shares were therefore transferred free of charge, § 17(2) sentence 5 EStG applies. The legal successors thus continue the applicant’s acquisition costs.

Partial transfer of GmbH shares – Respect for tax disadvantages

The partial payment transfer of a GmbH share results in tax disadvantages. This applies in particular if the sale in accordance with general principles would lead to a loss under § 17(2) EStG. In such cases, BFH orders a division of the entire sale business into a paid and a free part. Decisive for this is the ratio of the agreed sale price to the common value of the shares, which is usually to be determined according to the simplified income value method (§§ 199 to 203 BewG).