Normally, the tax on the profit of a GmbH is about 50% of the profit. However, if a typical silent partner in the GmbH is 99.9%, then he is basically entitled to the entire profit. In return, the distribution to the silent partner for the GmbH is an expense that reduces its profit by the same amount. This practically eliminates the tax at the level of the GmbH and its shareholders. For this, the typical silent partner has to tax the profit. Since these are income from capital assets under the law, the flat-rate capital gains tax of only 25 % of the profit is incurred here. In this way, when taxing the profit of a GmbH, you pay only 25% instead of 50% in taxes.

As an independent legal entity, the GmbH also carries its own income tax in the form of corporate tax. In this context, the corporate tax rate is the same as 15 % of profit. In addition, in most cases, there is the trade tax, which depends on the amount charged by the respective city or municipality in which the company has its registered office. However, it can be assumed that the business tax covers about another 15% of the profit. Because this is the average value of the amount of trade tax in Germany. Only in the case of a real estate GmbH can the trade tax be saved by using the extended property reduction.

This brings us to shareholder level with the remaining 70% on average. Here the income tax applies to the distributed dividend. However, the distribution of profits to a shareholder is a special case in this respect. Firstly, the decision whether a profit is actually distributed lies with the shareholders, who must vote for it at the general meeting in accordance with a majority of the voting rights. Secondly, the dividend paid to the shareholders in the context of the assessment for income tax constitutes an income from capital assets. Thus, flat-rate taxation with a tax rate of 25% is applied – regardless of the actual amount of profit. Although you can count the savings flat rate of EUR 801, but this also covers all actual advertising costs.

2. Paying only 25 instead of 50% taxes – pure fiction?

Ultimately, the shareholders are left with only 50% of the profit originally generated by the GmbH. Compared to the taxation of a sole proprietor or a partner of a partnership, this corresponds to the level of taxation of those who apply the top tax rate. However, since you often generate profits with a GmbH that would otherwise lead to the application of the top tax rate, this comparison is basically then irrelevant.

But what kind of tax office would we be if we took up the optimization of taxes and had no suitable savings model in store? In fact, we can ensure that you pay 25 instead of 50 % in taxes on the GmbH’s profits. And the key to this mysterious path is silent society.

3. The Nature of Silent Society

A silent partnership is a contractual agreement between a company and an investor, the silent partner. The silent partner usually provides the company with financial resources. However, other assets can also be the content of a silent society. In return, the company grants the silent partner a share of the profit. Since the agreement on a silent partnership is of a purely bilateral nature, the Commercial Code does not provide for entry in the commercial register. Therefore, the term “silent society” sounds very plausible in this context.

However, a silent society can exist in many forms. Depending on the contractual structure, the typically silent society is distinguished from the atypically silent society. The two unequal twins we meet on our way, we introduce you briefly. But only one of the two can accompany us as a companion.

3.1 Characteristics of a Typically Quiet Society

The typically silent society embodies the very essence of the silent society. Since we have already presented this in the basics, there is only room for some additions at this point.

Thus, the silent partner can exclude a participation in a possible loss of the company. However, he waives his say in the management of the company. However, sometimes the most important addition is that the typical silent partner invests the profit due to him in the context of his income tax return as income from capital assets. Accordingly, its share of profits is taxed by capital gains tax at a flat rate of 25 % (§ 32d (1) EStG). On the GmbH side, on the other hand, the profit share of the typically silent partner represents an expense that corresponds approximately to an interest expense on a loan.

3.2 Characteristics of an atypically silent society

Compared to the typically silent shareholder, the atypically silent shareholder secures far-reaching contractual influence on the management of the company. In this way, he can control what happens to the capital provided by him within the company. In addition, he can agree in the articles of association that, in the event of a sale of the company, he is entitled to part of the profit earned.

Due to the fact that these characteristics indicate that a co-entrepreneur acts here rather than a pure investor, the term “atypically silent society” also comes. However, it also follows that the atypical silent partner taxed his profit from the company differently than the typical silent partner. To be precise, you allocate these profits to him as income from business and then tax them accordingly with the personal tax rate.

4. Only pay 25 instead of 50% taxes – this is how it works

So now we reveal the secret that accompanies us on the way to the goal to pay only 25 instead of 50 % tax on the profit of the GmbH. For this purpose, we allow a typical silent partner to invest with a contribution of 99.9% in the GmbH. However, this also means that he is entitled to 99.9% of the GmbH’s profit. Since we now know that this profit share appears in the books of the GmbH as an expense, it is clear that the GmbH practically no profit remains, which it has to tax by corporation tax and trade tax. This means that the shareholders of the GmbH also receive no profit.

But who pays taxes on the profit? There is actually only the typical silent partner. And so it is. However, because it assesses the profit under Section 20(1)(4) EStG as income from capital assets, it applies the flat-rate tax rate of 25 % when collecting the capital gains tax.

Although we have taken some shortcuts in the tax calculation on our way, such as the lack of consideration of the savings flat rate. In addition, the tax amount also represents a further 5.5% solidarity surcharge and possibly church tax. Nevertheless, the basic statement about the success of this model remains unchanged: you save (almost) 25 % in taxes compared to the usual taxation of the GmbH. But even more impressive sounds the rounded net profit you get here: a whopping 75%!

Paying 25 instead of 50% taxes, and the Treasury is just watching?

Yes, the tax office gives this taxation its blessing in practice. What else is left to the financial authority? Since the legal situation in this context is clear, if you do everything right, you only have to wait for the corresponding income tax assessment.