The concept of the so-called partial operation is mentioned in various laws, but without being legally defined by the legislature. In particular, the Income and Trade Tax Act (EStG/GewStG) and the provisions of the Conversion Tax Act (UmwStG) are relevant. We take a closer look at when a partial operation is available and what peculiarities result from this classification.
According to the relevant case law and applicable administrative instructions, legislators mean a commercial enterprise which as such is integrated into another enterprise. A special feature is the possibility of almost complete “carve-out” at any time, i.e. the independent “viability” of the basically subordinate company (BFH of 18.10.1999, GrS 2/98).
Specifically, the following conditions must be jointly met for the acceptance of a part of the company according to the abovementioned judgment and the literature (e.g. Brandis v. Heumann, UmwStG 2006, § 20, point 52):
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.