date | theme

06.07.2020 | Lock periods in conversion tax law – contribution in kind and exchange of shares

08.07.2020 | Closure periods for merger and change of form in GmbH & Co. KG: § 6 UmwStG

10.07.2020 | Tax neutral division: What is the blocking period for a split or separation? (this contribution)

12.07.2020 | Conversion of the GmbH into a GmbH & Co. KG: blocking period 5 years!blocking period § 18 Abs. 3 UmwStG

14.07.2020 | Lock period for contributions in kind: § 22 para. 2 UmwStG

16.07.2020 | 7 years blocking period when entering GmbH: § 24 Abs. 5 UmwStG

If assets are transferred from one corporation to another by division, separation or partial transfer, the transfer can be carried out in accordance with § 15 para. 1 S. 2 UmwStG tax neutral. The tax-neutral division is possible because it is transferred to the transferred corporation § 11 para. 2 S. 1 UmwStG and to the shareholder § 13 para 2 S. 1 UmwStG applies.

In order to prevent a subsequent tax burden, in addition to the requirement of an existing partial operation, the blocking period of § 15 para. 2 S. 1 UmwStG. Observance of the blocking period does not reveal the hidden reserves and the tax advantages in the transfer of assets remain.

As soon as assets are transferred to another corporation in the event of a division or partial transfer, the provisions of § 15 para. 1 S. 1 UmwStG §§ 11 to 13 UmwStG.[2] According to § 11 para. 1 UmwStG therefore applies that transferring assets are taken over at the common value. However, in accordance with paragraph 2, the assets may also be taken over at book values upon request. [3] The blocking period of § 15 (2) S. 4 UmwStG is intended to prevent taxation being circumvented in the case of the sale of a part of the business. [4] In this case, the corporation is transferred with the aid of the tax-neutral division and then tax-free, i.e. tax privileged to a participating corporation. [] 5]

2.Requirements and legal consequences for a tax-neutral division

If, within 5 years of the tax transfer date, shares in a corporation participating in the division which constitute more than 20 percent of the shares existing in the corporation before the effective date of the division are sold, the requirements of § 15 para. 2 S. 4 UmwStG. [] 6]

Since only the prerequisites for a later sale have to be present and this is objectively possible for each division or separation, the intention to sell counts. This must exist at the time of the division, followed by direct or indirect disposal to an outside person. As long as there is no sale, there is only a risk of tax loss. However, this alone is not enough to reject tax privileges. [7]

However, the FG Hamburg decided on 18.09.2018 that § 15 para. 2 S. 3 UmwStG independent of § 15 Abs. 2 p.4. This means that if the conditions for a sale through the division are proven, the tax advantage is denied. This also applies if the harmful sale is carried out after the five-year period or if the 20 percent limit is not exceeded. This often occurs if contractual provisions on the planned sale already exist at the time of the division. [] 8]

For the separation of shareholders, the participation rate from sentence 4 is irrelevant. In order to be able to apply § 11 para 2 UmwStG, the participation must have existed for at least five years before the tax transfer date (§ 15 para 2 p. 5 UmwStG). This means that if a capital increase is made within the five-year period, this is not harmful as long as the original participation has existed for more than five years. [10]

If shares are acquired within the deadline, it is sufficient if a participation existed five years before the deadline. [11] If it is a newly acquiring shareholder who acquires the shares, he may credit the previous ownership period. [12] Similarly, the prior period of possession must be taken into account in the case of a free acquisition such as gift, inheritance, anticipated succession or division due to divorce. [] 13]

The legal consequence of the fulfilment of the abuse is the exclusion for the evaluation right according to § 11 para. 2 UmwStG for all transferring branches. [14] Tax notices are here according to § 175 Abs. 1 No. 2 AO. [] 15)