In addition to the contributions and conversions provided for by the UmwStG, taxable contributions can also be made without the UmwStG. These contributions outside the UmwStG are to be assessed in accordance with the principles of the income tax assessment. In this case, a distinction shall be made between “transfers against the granting of new shares” and “transfers without the granting of new shares”. In the following you will therefore find an overview of how contributions outside the UmwStG are to be assessed for tax purposes.
If the scope of the UmwStG is not opened, the tax-advantageous regulations of the UmwStG cannot be used. It is then necessary to use the general income tax principles[95], distinguishing whether the contributor receives a consideration in the form of company rights for the gift of his assets or whether the transfer is free of charge. This is explained in the following sections 2. (transfers against granting of new shares) and 3. (transfers without granting of new shares).
2. contributions against the granting of new shares
If the acquiring corporation grants the transferor (new) company rights in return for the transfer of his operating assets, this constitutes, according to h.M., an exchange-like sale process.[96] If the subject of the sale process is a business, part-operation or share of a joint venture, § 16 EStG is applicable. In the case of transfers of individual assets, it is a current profit according to § 15 or § 18 EStG. For such exchange-like divestments neither § 16 nor §§ 15 and 18 EStG contain a method for determining the sale price. Since § 6 para 6 p.1 EStG stipulates that the acquisition costs of the transferor for the received shares are to be measured at the common value of the transferred object, it seems appropriate to use this same common value also for the determination of the sale price.[97] Thus, the general income tax principles lead to the discovery and immediate taxation of the hidden reserves in the transferred assets. [] 98]
3. contributions without granting new shares
If the transferor does not receive any new shares in the acquiring company for the transfer of his business assets, there is a hidden contribution whose tax effects for the shareholder are not regulated by law. Since the transferor does not receive any consideration, the BFH considers that there is no swap transaction, but a free transfer of the business assets to the limited company.[99] Consequently, the free transfer would have to be carried out in accordance with § 6 para. 3 EStG at book values. Whether the book value continuation of § 6 Abs. 3 EStG in cases of concealed deposit – and thus also to corporate law transactions – is controversial in the literature and can remain in the present case. [100]
If the transferor holds the new shares in the corporation in his private assets, the transferred assets of his transfer will no longer serve his original business. If the object to be transferred is a company, part-operation or part-contractor, this inevitably leads to an operating task in accordance with § 16 para. 3 EStG.[101] If individual assets are transferred to the corporation, they are first transferred in accordance with § 4 para. 1 S. 2 EStG for non-business purposes in the private assets. Thus, the operating task according to § 16 EStG or the removal according to § 6 Abs. 1 no. 4 EStG for the taxation of hidden reserves before then the concealed contribution to the limited company. [102]
3.1. Contribution from operating assets
If, on the other hand, the transferor keeps the new shares in the limited company in his operating assets, it can be considered that the assets also serve indirectly their original operation after the transfer, so that a withdrawal pursuant to § 4 para. 1 EStG and thus a resulting profit realization is eliminated. In this case, however, the profit realization results from § 6 Abs. 6 p. 2 EStG. Thereafter, in the case of the hidden deposit, the acquisition costs of the participation increase by the partial value of the asset deposited. Accordingly, the assets transferred are to be derecognised in the transferor’s tax balance sheet and replaced by an increased shareholding in the acquiring corporation. [103] The principles of balance sheet tax law require that the difference between the book value of the transferred assets and the increase in the shareholding approach – which according to § 6 para. 6 S. 2 EStG finally corresponds to the partial value of the transferred assets – is to be recognised in profit or loss and ultimately leads to the discovery of the hidden reserves in the transferred assets.
4th interim result
As a result, a tax-neutral contribution is not possible outside the scope of the UmwStG and is always associated with immediate taxation.
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.