Profit distributions between corporations – Tax treatment

§ | Paragraph

para. | paragraph

SEGMENT002 TFEU | Treaty on the Functioning of the European Union

Art. | Article

BFH | Bundesfinanzhof

DTA | Double Taxation Agreement

EStG | Income Tax Act

ECJ | European Court of Justice

ff. | following

GewStG | Business Tax Act

Hs. | half sentence

iH.v. | in the amount of

i. S. d. | in the sense of

KapG | Capital company(s)

KöMoG | Law for the Modernization of Corporate Tax Law

KSt | Corporate Tax

KStG | Corporate Tax Act

No | Number

PersG | partnership(s)

S. | sentence

SolZ | Solidarity Surcharge

vGA | hidden profit distribution(s)

zVE | taxable income

plus | plus

Profit distributions between corporations are widespread in practice. However, their tax treatment is sometimes quite complex. Although German tax law applies in principle a tax exemption for profit distributions between corporations, certain conditions must also be met. If such a distribution of profits even goes to a foreign corporation, further special features must be considered. And for hidden profit distributions, separate regulations also apply.

Today, the environment is constantly changing, whether due to digitalization or the constantly changing legal laws by the legislature. The changing environmental conditions are not only inferior to natural persons, but also many companies. It is therefore of the utmost importance for companies to adapt from time to time to these ongoing changes. Every prospective entrepreneur should ask himself at the beginning of the start-up stage, the question of the appropriate legal form of his future company. The choice of legal form can be essential to the development of the company and should therefore be carefully and thoroughly planned. If entrepreneurs do not sufficiently deal with the planning, it can come at the start-up stage and in the further course of fatal errors, which could have significant damage for the entrepreneur or the company.

In particular, considerable differences in tax law result from the choice of legal form. For example, corporations are themselves taxed when profits are generated, i.e. they are independent tax entities. They are subject to corporate and business tax plus SolZ.[1] If the profits are distributed, taxation is carried out at shareholder level. This principle of taxation is known in literature as the principle of separation. On the other hand, the profits of a partnership are attributed directly to the shareholders, with taxation resulting from the personal income tax rate. [2] The partnership itself is subject only to trade tax. [3] Unlike corporations, profits in partnerships are not separated, but are considered “transparent”, through which you can look directly at the shareholders. Therefore, this taxation principle is considered a transparency principle in the relevant literature.

As part of the elaboration “Distributions of profits between corporations – Tax treatment”, the corporation is first discussed, including in particular the classification into the German legal system. Subsequently, the reader is shown the differences of the corporation compared to the partnership, especially in view of the tax aspects. This should take the reader by the hand to facilitate the entry into the tax treatment of profit distributions between corporations, which is the core topic of the elaboration. The present work is concluded with a summary and the resulting conclusion.

In the following part of the work, as already mentioned in the introduction, the reader will now be brought closer to corporations. In particular, the tax bases and the difference to the taxation of partnerships are to be crystallized. This is only of an introductory nature and is a prerequisite for ensuring fundamental understanding.

Corporations, unlike their counterpart, the partnerships, can be formed by one or more partners. The objective of the company is defined by the shareholders, whose task is to carry out this objective for the benefit of the company. Ipso Iure, i.e. by virtue of law, is conferred important characteristics on corporations, since they are classified as a legal entity[4] under civil law and are subject to special provisions of commercial and tax law. [5] In particular, when setting up a KapG, it must be noted in tax law whether the establishment should take place by cash or in kind. [6] Depending on the form of company, the prescribed minimum capital must be contributed before the company is founded. The capital injection is intended to limit the shareholders to their own assets in the event of a liability. [7] In contrast to the shareholders of a PersG who are liable with their private assets, the liability situation of the shareholders of a KapG is a clear relief. This is one of the reasons why KapG is considered one of the most popular legal forms in Germany. This thesis is again clarified by the statistics shown below.

Figure 1: Statistics: Societal forms in Germany

Source: Federal Statistical Office, Legal Units by aggregated legal forms, https://www.destatis.de/DE/Topics/Industry/Company/Company Register/Tables/Company-legal forms-wz08.html (2021-12-06) [accessed 2022-08-31]

As already mentioned, corporations count as independently legally competent tax entities, which is a property of corporations, in particular corporations. In addition, since then, the 25. June 2021 published KöMoG[8], also opting for the corporation in the taxation rules of the corporations according to § 1a KStG. Thus, the corporations – like natural persons – are seen as independent and are taxed independently in the sense of the KStG. Corporate income tax is a polarization to income tax, as it is often seen in literature as income tax for corporations. Entities can be unlimited or limited taxpayers, according to §§ 1, 2 KStG.[9] The capital companies which have their management or domicile in Germany according to § 1 para. 1 KStG. This refers to all types of income generated by the KapG gem. § 1 Abs. 2 KStG. The legislature defines in § 7 para. 1 KStG, how the corporate tax is measured. The basis of assessment for corporate tax is taxable income. The taxable income is the income i. S. d. § 8 KStG, which must be determined according to the provisions of the EStG and the KStG. [10] The income determined is finally subject to a tax rate of 15% plus the SolZ of 5.5% according to § 23 para. 1 KStG.

Every business enterprise in Germany in accordance with §§ 15 EStG, 2 para. 1 GewStG is also subject to trade tax. Also affected are KapG according to § 2 Abs. 2 p. 1 by weight. Each municipality sets up its own lifting rates, which are levied by the commercial enterprises as object tax[11]. The trade tax measurement amount serves as a basis for assessment according to § 14 GewStG and is calculated from the multiplication with the so-called GewStG. Tax measurement amount according to § 11 Abs. 2 GewStG, minus the allowances and the business income rounded off to a full hundred euros. The business income is calculated from the additions and reductions according to §§ 8, 9 GewStG. The output variable forms the zVE, which can be determined from the provisions of the EStG and KStG. Multiplication of the weight by weight measurement amount by the lifting rate results in the business tax. [] 12]

As already mentioned in the introductory part of the work, the taxation of shareholders in capital and partnerships takes place in various ways. In the case of limited liability companies, taxation at the level of shareholders only takes place if a distribution is made to them. In contrast to the partnership, the profits of the company are immediately attributed to the shareholders. These taxing features are known in the literature as the separation principle and transparency principle, which will be described below. This is an essential part of understanding the subsequent chapters, which is the main part of the elaboration.

The separation principle describes in tax law a type of corporate taxation, which is reserved in particular for corporations. [15] The profits of a corporation circulate within the company and are taxed separately by the shareholder. Saving the profits can bring benefits, such as reinvesting within the company or presenting it to a bank to maintain the credit score. Taxation at the level of shareholders only takes place when the profits achieved by the organ company or the company's shareholders are taxed. corporation is distributed. In the light of the determination of the taxable income at the beneficiary, it is necessary to differentiate whether the organ carrier or the beneficiary is the beneficiary. shareholders are dividends subject to income tax or corporate tax. [16] If the recipient of the dividend determines it in accordance with the provisions of the EStG, a distinction must be made as to whether the participation in the organs or the shareholdings of the shareholders is in accordance with the provisions of the EStG. corporation is held in business or private assets. [17] In private assets, the dividend is treated as income from capital assets according to § 20 para. 1 no. 1 EStG and is paid with the withholding tax plus the SolZ is taxed to counter double taxation. The withholding tax is a special and uniform tax rate of 25%, § 32d para. 1 S. 1 EStG.[18] The Treasury also grants a possibility for taxpayers who are subject to a lower income tax rate than 25% to make a favorable examination by applying for the capital income determined in accordance with § 20 EStG in accordance with § 32d para. 6 EStG. The amount determined is calculated using the tariff rate rate of ESt instead of the uniform withholding tax. [19] When considering the abovementioned provisions, it must be taken into account that advertising costs actually incurred cannot be claimed, but only a lump sum of 801 or 801. 1602 Euro for joint investment, § 20 Abs. 9 EStG.

An entrepreneurial interest is assigned to the recipient as soon as he directly or indirectly owns or holds at least 25% shares in the company or with a participation of at least 1% and works for it. Through the participation of business assets, the taxable person is allowed to subject the dividend to the partial income procedure. By applying the Parts Income Procedure, 60% of the distribution is subject to the personal ESt rate and 40% of the distributions remain tax-free according to § 3 no. 40d EStG. The peculiarity of the partial income procedure, in contrast to the withholding tax or cheaper examination, is that the taxpayer can deduct 60% of the actual advertising costs incurred. [] 20]

In the case of corporate taxpayers, the dividends are in principle tax-free according to § 8b para. 1 KStG.[21] From the tax-free dividends, regardless of domestic or foreign participations, according to § 8b para. 5 KStG flat-rate 5%, as non-deductible operating expenses are added off-balance sheet. [22] However, some conditions are necessary to be able to claim the tax exemption under §8b KStG, which will be examined in more detail in the next chapter.

partnerships do not constitute their own tax entities from the point of view of ESt. They are only a subject of income determination. Thus, PersG are only subject to trade tax.[23] § 15 para 1 p. 1 no. 2 Hs. 1 EStG provides that the profit shares of shareholders of a PersG, where they are counted as co-entrepreneurs, are to be declared as income taxable. [24] As long as the PersG does not remunerate its profits under § 34a EStG or opt for corporate tax under § 1a KStG, the transparency principle calculates the profit or loss from the PersG proportionally and directly – unlike in the case of the KapG – with the co-entrepreneurs. At the level of shareholders, the type of income is to be checked. The income taxable income of the shareholders, which must be taxed with the personal ESt rate, may have the characteristics of the Income of the business enterprise according to § 15 EStG, self-employed work according to § 18 EStG or agriculture and forestry according to § 13 EStG. A further implementation of the taxation of partnerships is deliberately waived, as this is not the main part of the work and would go beyond the scope by the limited number of words.

In the following part of the work, the profit distributions between the corporations will now be examined. In particular, their tax impact is addressed. In chapter 3.1, the reader is introduced to the open payout. In relation to the open profit distribution, the next sub-chapter: Chapter 3.2, covers the hidden profit distribution and its tax implications.

The basic tax exemption within the meaning of § 8b KStG is linked to various conditions known in literature as the free float and box dividends. By the judgment of 20.10.2011[25] the ECJ has fundamentally changed the taxation of free float dividends. The reader will also be shown the current tax effects of the box and free float dividend.

3.1.1 Box dividend

§ 8b KStG is widely applied in practice and is one of the central provisions of the KStG. The legal provisions of the standard are intended to treat distributions and profits from a sale between corporations tax-free, as already mentioned in chapter 2.2. The Treasury wants to counter double taxation of distributable profits between corporations that would result if the distributing company and the receiving company had to tax the profits.[27] The background is that without the tax exemption in multi-storey shareholding chains, too high a tax burden would arise, since each corporation at each level would have to tax the profit once with the corporation tax and only then can pay out. In German income tax law, however, the principle is that the profit distribution should only be taxed at the end of the multi-storey shareholding chain, which is usually achieved by a natural person. [] 28]

The tax-free participation, i.e. Box dividend is in the basic rules of § 8b para. 1 KStG. The legislator refers in the standard to the expression “remuneration”, which in the income tax law as revenue of § 20 para. 1, 2, 9 and 10a EStG. The profit distributions received in the case of corporations represent a return under commercial law, which must be entered in the books accordingly.[29] Tax law aims at the system of § 8b para. 1 KStG is based on the fact that the distribution of profits resulting from the participation must be adjusted off-balance-sheet accordingly in the corporate income tax calculation. [30] However, it should be noted that according to § 8b Abs. 5 KStG a fictitious operating expense prohibition applies. Thus, lump-sum 5% of the tax-free emoluments covered by § 8b KStG are to be added off-balance sheet as non-deductible operating expenses. [31] In the case of exemption of dividend income, it also does not matter whether the company has its registered office in Germany or abroad, or whether it is subject to unlimited or limited taxation in accordance with §§ 1 and 2 KStG. In addition, it is not necessary for a DBA to be present. The foreign limited liability company must, in a test of applicability, constitute a KapG similar to domestic circumstances. [32]

In order for the above-mentioned regulations to be applicable, the following requirements must enter into force, which the legislature has laid down in § 8b para. 4 KStG. According to § 8b Abs. 1 KStG, a minimum participation ratio of 10% in the distributing company be present at the beginning of the calendar year. The participation shall take place directly or indirectly in the share capital or share capital. It is to be assumed a strict deadline principle, which is aimed at the conditions at the beginning of 01.01. at 0 o'clock. In extreme cases, under-year holdings would thus be 100% fully taxable. The legislature introduced § 8b para 4 S. 6 KStG in order to counteract these extremes. Accordingly, the share of at least 10% acquired during the year is considered equal to a share at the beginning of the calendar year. [33] The box dividend also counts at company level in the context of trade tax. However, it should be noted that instead of the 10% shareholding, a shareholding of 15% is necessary in order for these to remain tax-free under the trade tax. [34]

3.1.2 Free float dividend

The taxation of so-called Free float dividends were fundamentally changed by the judgment of 20.10.2011[35], which concerns both the factual and the personal scope of application. [36] By the judgment, the ECJ had clarified that the burden of shareholdings of less than 10% for limited taxable entities with capital gains tax is contrary to the freedom of movement of capital i.e. 63 of the TFEU. The newly introduced § 8b para 4 KStG should create a solution to this problem, which was created by the approval of the Bundestag on 28.02.2013[37].

The current legal situation for the taxation of dividend distributions until 28.02.2013 Free float dividends were considered that the corporation to be distributed was subject to § 43 para. 1 no. 1 EStG ff. 25% of the distribution has to be withheld as capital gains tax in order to pay it in the context of the capital gains tax application. The corporation that received the distribution had to record the distributions as income under commercial law, but was allowed to record them off-balance sheet pursuant to § 8b para. 1 KStG correct. In the same course, 5% of the dividend according to § 8b Abs. 5 KStG, reckoned as non-deductible operating expenses

become.[38] Compared to the current version, it was not necessary to have a minimum shareholding of 10% in order to enjoy the advantages of § 8b KStG.

For all free float dividends distributed after 28.02.2013, the new regulation applied for the first time. The new regulation of § 8b para 4 KStG standardizes an income tax liability for all free float shares in domestic and foreign receiving companies. The new regulation concretizes and is limited exclusively to § 8b para. 1 KStG or the free float dividends. Other distributions of profits and the capital gain according to § 8b Abs. 2 KStG shall remain unaffected regardless of the level of participation. [39] The elaboration is limited exclusively to the dividends, therefore the aforementioned rules are not further analysed. Fundamentally, it must be stated that any distribution with a direct participation in the share capital or share capital below 10% is to be taxed in full, according to § 8b para. 4 p. 1 Hs. 1 KStG. However, § 8b para 4 S. 1 Hs. 2 also permits holdings in assets or cooperative assets.[40] In particular, the literature points out that, unlike a box dividend, indirect holdings are disregarded in a free float dividend. For the minimum shareholding ratio, only direct participations in unlimited or limited corporate taxpayers domestic or foreign corporations count.[41] In practice, this requirement represents an enormous hurdle, especially for multi-storey companies.

In the previous chapter, the reader was introduced to the open profit distribution. The next chapter presents the hidden distribution of profits with its tax implications. First of all, it will be discussed what one understands by a hidden profit distribution, short vGA. Subsequently, the tax consequences between the corporations are considered.

3.2.1 Basics of the vGA

The vGA is not defined in the law. The legislator characterizes these in § 8 para. 2 KStG, with the words: “Even hidden distributions of profits and distributions of all kinds on profit participation rights, with which the right to participate in the profit and liquidation proceeds of the limited company is associated, do not reduce income.” “[42].” The subject matter of the vGA is a central component in tax law, as well as in the law of corporations, because it concretizes and crystallizes the principle of separation between the company and the shareholder. The legal loophole, which arose from the non-fixed definition of the vGA, was decided by the BFH in a judgment[44] and defined the vGA as a reduction in assets or an increase in assets prevented by an event in the company relationship, which affects the amount of income and is not in connection with an open profit distribution. The financial administration has adopted and listed these statements in KStR R 8.5 without restrictions. Therefore, a vGA exists when the assets of a KapG have decreased or have not increased, which would have been the case under regular or normal treatment. This must be done under company law. [45] For example, a vGA may result from the following constellations: a service provided by a shareholder or the company without or low remuneration, or an expense incurred by the company or the shareholder without or no adequate consideration.

3.2.2 The vGA between corporations

A valuation of the vGA is generally based on the common value according to § 9 BewG of the Asset Advantage. This corresponds to the value of the remuneration which would have been received by a third party, i.e. the value which would have been obtained in a normal business transaction.[46] At the company level, it should be noted that the resulting sales tax must be included, because the vGA according to § 8 Abs. 3 S. 2 KStG arises as a gross amount. However, this will not be added again in the context of the profit determination according to § 10 No. 2 KStG.[47] In order for a vGA to be available or to be reclassified. is effective, a difference must result from the income determination i. S. d. § 4 Abs. 1 S. 1 EStG. In the first step, the actual profit from the tax balance is compared with that of a fictitious balance sheet in order to find the difference. The corresponding value represents the vGA, which is to be corrected off-balance sheet in the second step. [] 48]

In the elaboration it is assumed that a KapG exists or exists at the level of the shareholder. the shareholder is a KapG holding a majority of the voting rights. In the following, the taxation of the VGA will be explained at the level of the shareholder, i.e. in a parent-subsidiary constellation. The vGA must be subjected to the partial income procedure for the accounting shareholder or, in the constellation of a KapG, to the taxation of § 8b KStG. [49] This is because the parent company receives a fictitious dividend through the vGA, which according to § 8b para. 1 KStG is tax-free. However, here too, as already described in detail in chapter 3.1,

that 5% of the dividend according to § 8b para. 5 KStG are to be added off-balance sheet. § 8b para 4 KStG is to be disregarded, because in our constellation the parent company owns more than 10% of the share capital or share capital of the subsidiary.

The work provided a detailed overview of the tax treatment of profit distributions between corporations. In view of the above, it is clear that this is a very complex area of tax law, which can be identified only by looking at individual topics separately. The elaboration provided insights into the legal basis of corporations, including their taxation. Unlike other companies, the shareholders of a corporation are taxed strictly separately, which is commonly known in literature as the principle of separation. This was presented in the elaboration against the transparency principle and comprehensively explained. §8b KStG, which plays a very central role in the taxation of limited liability companies and is increasingly common in practice, emerged as a very important topic in the context of the tax effects of profit distributions. Unpleasant tax consequences can be avoided in advance by careful examination and compliance with formal requirements, which have been discussed in the presented chapters of open and hidden profit distributions.

In conclusion, it can thus be said that in the case of intended distributions of profits, it should be ensured that a minimum participation in the share capital or share capital is at least 10% at the beginning of the calendar year. The minimum shareholding guarantees the receiving corporation that the dividend remains 95% tax-free. In addition, particular attention should be paid to ensuring that performance relationships, independent of related parties, are organised as if they were concluded with a third party. As a result, a hidden profit distribution can be prevented.

Aichberger, Thomas (withholding tax, 2022): Withholding tax, in: Weber, Klaus (ed.), Weber Legal Dictionary, 28.

Aurich, Dorit (insolvency, 2022): Tax law in insolvency – Other taxes and ancillary services, in: Fridgen, Alexander, Geiwitz, Arndt, Göpfert, Burkard (ed.), BeckOK Insolvency law, 27th ed., Munich: C.H. Beck, 2022, paragraphs 1 – 112

Berger, Jonas, Tetzlaff, Gunnar (Schachtelbeteiligungen, 2021): On the under-year acquisition of box holdings according to § 8b para 4 sentence 6 KStG, in: NWB- Steuer und Wirtschaftsrecht, Zeitschrift Nr 39 vom 01.10.2021, p. 2890

Decision of the German Bundestag on the law implementing the ECJ judgment of 20 October 2011 in case C-284/09, 146/13 – of 28 February 2013

BFH judgment on the hidden distribution of profits, I R 44/85 BStBl 1989 II – of 22.02.1989

Federal Law Gazette for the Modernization of Corporate Tax Law Part 1 No. 37 – of 25. June 2021

ECJ judgment on the unequal treatment of dividend taxation, C-284/09 – of 20.10.2011

Gehrmann, Reinald (capital company, 2019): Capital company, in: NWB- Tax and Commercial Law, infoCenter 2019

Geißer, Martin (§ 8b, 2022): § 8b Participation in other corporations and associations of persons, in: Mössner, Manfred, Oellerich, Ingo, Valta, Matthias (ed.), Corporate Tax Law Comment online, 2022, paragraphs 1 – 850

Golombek, Andre (corporations, 2022): Establishment of corporations, in: Beck’sches Steuer- und Bilanzrechtslexikon, 59th edition, Munich: C.H. Beck, 2022, paragraphs 1 – 18

Gosch, Dietmar (§ 8b, 2020): KStG § 8b Participation in other corporations and associations of persons, in: Gosch, Dietmar (ed.), Gosch Corporate Tax Law Comment, 4th ed., Munich: C.H. Beck, 2020, paragraphs 1 – 683

Kusch, Karsten (§ 8b KStG, 2022): Participation in other corporations and associations of persons § 8b KStG, in: NWB- Steuer und Wirtschaftsrecht, Grundlagen vom 18.03.2022

Lahme, Stefan (Disclosed Profit Distribution, 2022): Disclosed Profit Distribution, in: Beck’sches Steuer- und Bilanzrechtslexikon, 59th edition, Munich: C.H. Beck, 2022, paragraphs 1 – 82

Lorenz, Michael, Tsyganov, Alexander (Dividends, 2022): Taxation of dividends and other capital income, Wiesbaden: Springer-Gabler, 2022

Mühlhäuser, Felix (Taxation, 2018): § 17 Steuer der GmbH, in: Römermann, Volker (ed.), Münchener Anwalts Handbuch GmbH-Recht, 4th ed., Munich: C.H. Beck, 2018, paragraphs 1 – 284

Rauh, Wolfgang (capital gains tax, 2022): Capital gains tax, in: Beck’sches Steuer- und Bilanzrechtslexikon, 59th edition, Munich: C.H. Beck, 2022, paragraphs 1 – 28

Rengers, Jutta (§ 8, 2022): KStG § 8 Determination of income, in: Heuermann, Bernd, Brandis, Peter (ed.), Brandis/Heuermann Income Tax Law, 162. ed., Munich: Franz Vahlen, 2022, paragraphs 1 – 1164

Schreiber, Ulrich (corporations, 2012): Taxation of corporations, 3rd ed., Wiesbaden: Springer-Gabler, 2012

Schreiber, Ulrich (Company, 2012): Taxation of companies An introduction to tax law and tax effect, 3rd ed., Wiesbaden: Springer-Gabler, 2012

Schüler, Eva Carolin (cross-border partnerships, 2007): German taxation of cross-border partnerships, Wiesbaden: Springer-Gabler, 2007

Stache, Ulrich (GmbH, 2019): Taxation of the GmbH, 2nd edition, Wiesbaden: Springer-Gabler, 2019

Störk, Ulrich, Büssow, Thomas (§ 272, 2022): HGB § 272 Equity, in: Grottel, Bernd, Schubert, Wolfgang J., Justenhoven, Petra, Störk, Ulrich (ed.), Beck’scher Bilanz-Komentar, 13.

Teufel, Tobias (capital company, 2018): § 2 Taxation of the capital company and its shareholders, in: Lüdicke, Jochen, Sistermann, Christian (ed.), Corporate Tax Law, 2nd ed., Munich: C.H. Beck, 2018, paragraphs 1 – 82

Wacker, Roland (§ 15 EStG, 2022): EStG § 15 Income from business operations, in: Weber-Grellet, Heinrich (ed.), Schmidt Income Tax Law, 41st edition, Munich: C.H. Beck, 2022, paragraphs 1 – 910

Wittlinger, Jürgen K., (capital company, 2022): Capital company, in: Haufe Premium, Lexikonbeitrag, 2022, o.S.

Dautzenberg, Norbert (GmbH, o.J.): Gesellschaft mit beschränkter Haftung (GmbH),

https://wirtschaftslexikon.gabler.de/definition/gesellschaft-mit-beschraenkter-haftung-gmbh-36671?redirectedfrom=35151 (without date) [accessed 2022-08-31]

Firma.de (separation principle, 2022): principle of separation in tax, debt and company law, https://www.firma.de/rechnungswesen/teilungprinzip-im-steuer-schuld-und-gesellschaftrecht/ (2022-03-21) [accessed 2022-08-31]

Tax rates (partnership, o.J.): Taxation of partnerships, https://www.steuerkurs.de/income tax-est/besteuer-partnership.html (no date) [accessed 2022-08-31]

[1] See Schreiber, U., Die Steuer der Kapitalgesellschaften, 2012, p. 251 f.

[2] See Schreiber, U., Die Steuer der Kapitalgesellschaften, 2012, p. 11 et seq.

[3] See Schreiber, U., Die Steuer der Kapitalgesellschaften, 2012, p. 94.

[4] See Wittlinger, J., Kapitalgesellschaft, 2022, o.S.

[5] See Gehrmann, R., Kapitalgesellschaft, 2019, o.S.

[6] See Golombek, A., Formation of corporations, 2022, paragraph 1 f.

[7] See https://wirtschaftslexikon.gabler.de/definition/gesellschaft-mit-beschraenkter-haftung-gmbh-36671?redirectedfrom=35151, accessed on 31.08.2022

[8] Cf. Act for the Modernisation of Corporate Tax Law 2021 – BGBL Part I No. 37, p. 2050.

[9] See Lorenz, M., Tsyganov, A. The taxation of dividends and other capital income, 2022, p. 39.

[10] See Schreiber, U., Steuer der Unternehmens, 2012, p. 252.

[11] Cf. Aurich, D., Steuerrecht im Insolvenz – Anders Steuer und Nebenleistungen, 2022, paragraph 1.

[12] See Stache, U., Steuer der GmbH, 2019, p. 196 f.

[13] Cf. Teufel, T., § 2 Taxation of corporations and their shareholders, 2018, paragraphs 1 et seq.

[14] See Wacker R., EStG § 15 Income from business, 2022, paragraph 160.

[15] See https://www.firma.de/rechnungswesen/teilungprinzip-im-steuer-schuld-und-Gesellschaftrecht/, accessed on 31.08.2022

[16] Cf. Teufel, T., § 2 Taxation of corporations and their shareholders, 2018, paragraph 3.

[17] See Mühlhäuser, F., § 17 Steuer der GmbH, 2018, paragraph 5.

[18] See Mühlhäuser, F., § 17 Steuer der GmbH. In particular, paragraph 6.

[19] See Rauh, W. Capital gains tax, 2022, paragraph 7.

[20] See Aichberger, T.,teileinfteverfahren, 2022, o.S.

[21] See Lorenz, M., Tsyganov, A. The taxation of dividends and other capital income, 2022, p. 40.

[22] See Lorenz, M., Tsyganov, A. The taxation of dividends and other capital income, 2022, p. 41 f.

[23] See https://www.steuerkurs.de/einkommensteuer-est/besteuer- Personengesellschaft.html, accessed on 31.08.2022

[24] Cf. Schüler, E., The German taxation of cross-border partnerships, 2007, p. 8.

[25] See ECJ judgment of 20.10.2011 – C-284/09

[26]Cf. Kusch, K., Participation in other bodies and associations of persons, 2022, o.S.

[27]Cf. Kusch, K., Participation in other bodies and associations of persons, 2022, o.S.

[28]Cf. Kusch, K., Participation in other bodies and associations of persons, 2022, o.S.

[29] See Herlinghaus, A., Remuneration in accordance with § 20 para. In this respect, the Court of Justice has ruled that the aid is compatible with the internal market.

[30] See Herlinghaus, A. Legal consequence, 2015, paragraph 123.

[31] See Lorenz, M., Tsyganov, A. The taxation of dividends and other capital income, 2022, p. 41.

[32] See Herlinghaus, A. Legal consequence, 2015, paragraph 125.

[33] See Berger, J., Tetzlaff, G. On the under-year acquisition of box holdings according to § 8b para. 4 sentence 6 KStG, 2021, p. 2890.

[34] See Lorenz, M., Tsyganov, A. The taxation of dividends and other capital income, 2022, p. 40.

[35] See ECJ judgment of 20.10.2011 – C-284/09

[36] See Geißer, M., §8b Holdings in other entities and associations of persons, 2022, paragraph 370.

[37] See decision of 28.02.2013 – BT-Drs. 146/13.

[38] Cf. Gosch, D., KStG § 8b Participation in other bodies and associations of persons, 2020, paragraphs 287 et seq.

[39] See Geißer, M., §8b Holdings in other entities and associations of persons, 2022, paragraph 373.

[40] See Geißer, M., §8b Holdings in other entities and associations of persons, 2022, paragraph 374.

[41] See Geißer, M., §8b Holdings in other entities and associations of persons, 2022, paragraphs 374 et seq.

[42] § 8 para. 3 p. 2 KStG

[43] See Lahme, S., Distributed Discounts, 2022, paragraph 1.

[44] See BFH judgment of 22.02.1989 – I R 44/85 BStBl 1989 II, p. 475.

[45] See Lahme, S., Distributed Discount, 2022, paragraph 9 f.

[46] See Lahme, S., Discreet distribution of profits, 2022, paragraph 56.

[47] See Lahme, S., Distributed Discount, 2022, paragraph 57.

[48] See Rengers, J., KStG § 8 Calculation of income, 2022, paragraphs 420 et seq.

[49] See Störk, U., Büssow, T., HGB § 272 Equity, 2022, paragraph 616 f.