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If you sell your shares in a GmbH, this is usually not taxable. However, there are exceptions for entrepreneurial divestments. Nevertheless, these are exempt from VAT. Under certain conditions, however, the option to pay VAT is possible. We explain when the option is possible and useful.

Selling shares in a GmbH: Then the sales tax must be observed

You want to sell your shares in a GmbH? Then you actually have to pay attention to the sales tax. The transfer of shares in a company constitutes a supply for VAT purposes. If power of disposal is provided, the delivery is carried out. If the participation is held by the seller in the business sector and the place of delivery is located in the country, there is a taxable turnover.

§ 4 no. 8 UStG exempts the transfer of the shares from sales tax. Nevertheless, you should deal with the sales tax valuation. If there are special requirements, you can opt for VAT liability according to § 9 UStG, which may be advantageous for you.

Sell shares in a GmbH: VAT principles

2.1. Sell entrepreneurial shares in a GmbH

In order for the income from disposal to be taxable when you sell your shares in a GmbH, the disposal must be carried out entrepreneurially. The mere holding and divestment of holdings is not entrepreneurial, regardless of the level of holding. However, the sale can be taxable if it has expanded the sales taxable activity of the seller directly, permanently or necessary. In addition, financial investors who acquire and resell companies can be entrepreneurs.

Furthermore, the provision of § 1 paragraph 1a UStG must be observed. Thus, sales in the context of a business sale are not subject to sales tax if both seller and buyer are entrepreneurs and the acquisition is for the buyer’s company.

However, the mere transfer of shares is in principle not a sale of business in this sense, because no individual assets are transferred. This may be different, for example, if, in the case of a business sale, the participation is transferred as part of the assets of an entire company under an asset deal.

2.2. Tax exemption

If the sale is business-driven, it is VAT-free under the conditions of § 4 no. 8 UStG. However, it should be noted that not all services in connection with the transfer necessarily fall under the exemptions. However, services of a purely administrative or technical nature are regularly excluded from the rules on the transfer of shares.

2.3 Option for standard taxation

If the sale of shares is taxable according to these principles, but exempt from VAT, the seller has the option to pay VAT according to § 9 UStG. However, this only applies if the shareholding to be sold is held by the divesting shareholder in a VAT company with sales tax-paying transactions. In addition, the transfer of the shareholding to another entrepreneur must be carried out for his company. This can be useful if you want to draw the input tax via the input tax deduction from the transaction costs, which you can otherwise only claim as increased acquisition costs.

Pure holding companies, however, regularly do not meet the requirements of the option. For the buyer, the option of the seller can be detrimental if he does not have a deduction for the purchase of the share, since the purchase price of the shares increases by 19 %. He is therefore well advised with a clause according to which the seller is forbidden the option to pay VAT.

Sell 3 shares in a GmbH – Recommendations for action

Even if you sell your shares in a GmbH, you should have the sales tax in mind. As a rule, a burden on the share transfer with sales tax will not occur or will be avoidable. In certain circumstances, however, it may make sense to make the VAT liability specifically in order to be able to claim the refund of input tax amounts. We advise in particular if you have high transaction costs and the buyer can draw the input tax from the purchase of the shares.