The purchase of a GmbH is possible in two different ways: as a share deal and as an asset deal. From a tax point of view, the asset deal is worthwhile for the buyer, but the share deal is worthwhile for the seller. Therefore, it depends on the outcome of the negotiations of the two parties which of the two options is applied. However, should the share deal actually remain without alternative, the willing party can still use some possibilities to save taxes. For this purpose, it executes the share deal with a holding company. Then you can merge both companies. Any financing costs for the purchase can then be considered tax-reducing.

On the one hand, you can buy your shares from the previous shareholders; This process is called a share deal. On the other hand, however, all assets of the company – we want to start from a GmbH as a model capital company – can be acquired individually. These goods enter their own company. The selling GmbH thus remains without content; It is then empty. This process is known as an asset deal.

Apart from the fact that share deal and asset deal are different things change owners and there are also different sellers and buyers, in the end a company has come from one hand to another. Why is the distinction between share deal and asset deal so important?

Well, because of the taxation that the legislature handles differently in both cases. While the share deal is more tax-advantageous for sellers, because you can use the parts income procedure and thus reduce taxes by 40%, buyers have the disadvantage. Although this process does not have any direct tax disadvantages for them, with an asset deal they would have significantly better tax conditions on their side. Because they could write off the acquisition costs paid for the acquisition of the assets. In other words: they would receive the acquisition costs completely reimbursed by the Treasury over the respective periods of use of the acquired assets – practically gifted. In the share deal this is excluded. This is why buyers favor the asset deal.

Nevertheless, as a buyer you can also save taxes on the GmbH purchase with a share deal. How this works, let us now present.

Suppose seller and buyer agree on the sale of a GmbH by share deal. The GmbH is solidly positioned and generates profits year after year.

In our design model, we recommend that the buyer finance the purchase price externally. This naturally entails interest costs. But that is what we are actually aiming for. But one by one.

First, the buyer establishes his own GmbH. In fact, it is now this GmbH that agrees the loan with their credit institutions. She now uses this loan and acquires the previously selected GmbH as a subsidiary. Thus, this acquiring GmbH automatically becomes a holding company. With the share deal, the holding company has become the parent company.

However, we have not yet generated any tax advantages for the holding company. Because if it receives the profits of its subsidiary in the future as dividends, it pays only 1.5% tax on them. At the same time, it has to pay the interest payments and the repayment. Although with such a low taxation a fairly high share of the operating profit distributed by the subsidiary is available for these services, it is even better.

After all, the acquired subsidiary GmbH pays around 30% tax (15 % corporate tax and business tax). And that's where you can start. By merging the holding company with the operating subsidiary, we can also combine the financing costs of one side with the main taxation of the other. The merger results in a single company which, on the one hand, has to pay interest costs but, on the other hand, is also liable to full taxation, with scope referring to all operating profits.

And the tax advantage? This is due to the fact that the new company can deduct the interest costs as operating expenses in its taxation. The higher the interest costs, the more the taxable profit shrinks. What remains for the repayment is a much higher amount than before the merger.

In the case of an upward merger, the previously operating subsidiary GmbH will be merged into the Holding GmbH. The holding company thus becomes operative GmbH. Through the merger, however, the GmbH can now transfer the values transferred from the subsidiary, i.e. all assets and liabilities, into its own trade balance. In other words, the hidden reserves created by the share deal with the holding company are shown in the trade balance. Thus, it stands in its external effect with significantly better numbers than before. For creditors, investors and business partners, the credit rating of the GmbH increases.

The downward merger, on the other hand, has other consequences. In this case, the shareholders of the previous parent company acquire shares in the previous operating subsidiary which hosts the parent company. For this purpose, the previously held shares in the parent company disappear. From a tax point of view, this is therefore an acquisition process. Although this is generally also tax-free at book values, this is sometimes associated with foreign shareholders with considerable effort.

There would be another aspect that should be taken into account in our Share Deal with Holding design model right from the start. If you buy a GmbH, then the probability is at least as great that you sell it again later. Therefore, you should make provision before the purchase of the GmbH in order to be able to save taxes later on the sale. For this purpose, in addition to the future parent company, which takes the actual purchase of the GmbH, another GmbH is founded as a holding company. In this way, a double holding structure is initially created during the GmbH purchase. The subsequent merger of the parent company with the acquired subsidiary GmbH will result in a simple holding structure with a parent company and an operating subsidiary.

The advantage here is that in future the operative GmbH can be sold almost tax-neutrally by the holding company; only 1.5% of the taxes are due to the box participation at the holding company level. However, if such a sale is pending without a holding company being present, it means that a holding structure must first be created in order to obtain this tax advantage. For this purpose, however, a contribution with a share exchange is necessary. In addition, this process is also subject to a blocking period (§ 22 paragraph 2 UmwStG). So it is much easier and more flexible if you plan right from the start the holding company that is already required at the end.