withholding tax (26.375 %) | Parts income procedure (60 % of the distribution x 40 % tax rate)
EUR 100,000 (gross distribution) | EUR 100,000 (gross distribution)
EUR 26.375 (tax) | EUR 24,000 (tax)
Sale proceeds | EUR 500,000
of which tax free according to § 3 no. 40 EStG: 40% | EUR 200,000
Interim results | EUR 300,000
deducted from it: cost (share capital) | EUR 25,000
deducted from it: value of the hidden deposit | EUR 100,000
Total cost | EUR 125,000
to be added, since according to § 3c paragraph 2 EStG 40% non-deductible expenses | EUR 50,000
Capital gain according to § 17 paragraph 2 EStG | EUR 225.000
Due to the so-called partial income procedure, certain capital gains are subject to taxation only up to 60%. At the same time, only 60 % of their operating expenses are deductible. At certain points, the partial income procedure is mandatory; elsewhere, the recipient of the services can voluntarily decide to use it. We give an overview of the individual case groups.
The partial income procedure is finally regulated in § 3 no. 40 EStG. Numerous provisions of the EStG refer to this standard.
Mandatory application of the Parts Income Procedure
In certain cases, the part income procedure is mandatory. In these circumstances, it ensures that there is no double taxation or burden on the respective income in the case of distributions from limited liability companies and the sale of corresponding shares.
If the law provides for the application of the partial income procedure without exception, taxpayers have no right to vote. The exemption must therefore be taken into account ex officio. This is relevant in the following cases:
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.