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Sale of stake

Table of Contents

1 Capital gains according to § 16 EStG
2 Overview of the sale of equity investments from 2009
3 Capital gains according to § 17 EStG
3.1 General
3.2 Substantial participation
3.3 Sale of capital shares in business assets
3.4 Scope of application of § 17 EStG
3.5 Participation within the meaning of Section 17 (1) EStG
3.5.1 Participations in private and business assets
3.5.2 The five year period
3.5.3 Company's own shares
3.5.4 Entitlements under Section 17 of the Income Tax Act
3.5.5 Special features of Section 17 (6) EStG
3.5.6 Asset Management Partnership
3.6 Capital gains
3.6.1 Determination of the capital gain
3.6.2 Creation of the capital gain
3.6.3 Loan losses as subsequent acquisition costs
3.6.4 Reversal of the sale
3.7 Exemption
3.8 Application of the partial income method
3.8.1 Temporal scope
3.8.2 Sales for recurring services
3.8.3 Sale of a 100% GmbH participation
4 Transfer of GmbH participations within the framework of the anticipated succession among relatives
4.1 Donation
4.2 Transfer against payment of a one-time fee
4.2.1 Basics
4.2.2 Participation is the transferor's private assets
4.2.3 Participation is the business assets of the transferor
4.2.3.1 Participation is less than 100%
4.2.3.2 100% participation
4.3 Transfer against recurring services
4.3.1 Basics
4.3.2 Participation is the transferor's private assets
4.3.2.1 Time-limited recurring services
4.3.2.2 Lifelong Recurring Benefits
4.3.3 Participation is the business assets of the transferor
4.3.3.1 Participation is less than 100%
4.3.3.2 100% participation
5 individual cases
5.1 Contribution-born shares
5.2 Concealed insert
5.3 Asset management partnership
5.4 Reserved usufruct in a substantial interest within the meaning of § 17 EStG and the subsequent replacement
5.5 Debt interest deduction in connection with a former participation
6 Dissolution gains or losses according to Section 17 (4) EStG
6.1 Basics
6.2 Insolvency-free dissolution
6.3 Dissolution in the event of bankruptcy
6.4 Supplementary Liquidation
6.4.1 Concept of supplementary liquidation
6.4.2 Time at which profit / loss is taken into account in accordance with Section 17 of the Income Tax Act
7 Capital losses
7.1 Overview of the consideration of losses
7.2 Circular sales and acquisitions of shares for the purpose of utilizing losses
7.3 Consideration of the partial income method
7.3.1 Participation losses up to the assessment period 2010
7.3.2 Participation losses from the 2011 assessment period
8 Treatment of the sale of participations under trade tax law
9 Treatment of the sale of investments under corporate tax law
10 Treatment of the sale of shares under VAT law
11 Bibliography
12 Related Lexicon Articles

1. Capital gains according to § 16 EStG

According to Section 16 (1) of the Income Tax Act, income from commercial operations also includes profits that are made when the property is sold

  • the participation in a corporation comprising the entire nominal capital (section 16 (1) sentence 1 no. 1 sentence 2 EStG). The sale is considered to be the sale of a part of the business if the entire stake in the corporation is part of the business assets of an individual taxpayer. or owned by a partnership and the entire investment is sold in the course of a fiscal year (R 16 (3) sentence 6 EStR). Section 16 (1) sentence 1 no. 1 sentence 2 EStG does not apply if the participation in the corporation is partly also part of the private assets of the taxpayer. heard (R 16 para. 3 sentence 8 EStR);

  • the entire share of a partner who is to be regarded as an entrepreneur of the company (Section 15 (1) No. 2 EStG);

  • the entire share of a personally liable partner in a partnership limited by shares (KGaA; Section 15 (1) No. 3 EStG; → corporations).

The profit made when only part of the share is sold is a current profit (Section 16 (1) sentence 2 EStG) and not a capital gain within the meaning of Section 16 EStG.

2. Overview of the sale of equity investments from 2009

Profits from the sale of shares acquired after December 31, 2008 are generally taxable in accordance with Section 20 (2) EStG. According to the Corporate Tax Reform Act 2008 of August 14, 2007 (Federal Law Gazette I 2007, 1912), capital gains are no longer to be recorded in accordance with Section 23 of the Income Tax Act, but are subject to the withholding tax of Section 32d (1) in conjunction with Section 43 (5) of the Income Tax Act (→ Income from capital assets, → flat rate withholding tax).

The shares sold are in

Business assets of a corporation

Business assets of a partnership

Private wealth

The profit is tax-free according to § 8b Abs. 2 KStG. According to Section 8b (3) KStG, 5% of the tax-free capital gains must be added back to income. This share is subject to both the corporation tax and the trade tax.

According to the partial income method, 60% of the capital gain is subject to income tax and trade tax.

For profits from the sale of shares that after December 31, 2008 are acquired, the following applies (Section 52a (10) EStG):

  • If the sold share belongs to a participation within the meaning of Section 17 EStG, Section 17 EStG is to be applied. According to the partial income procedure of § 3 No. 40 letter c EStG, 60% are subject to taxation.

  • If Section 17 of the Income Tax Act is not applied, capital gains are taxable in accordance with Section 20 (2) sentence 1 no. 1 of the Income Tax Act. The one-year speculation period does not apply to taxation according to § 20 EStG. The tax rate for capital gains is 25% according to Section 32d (1) EStG. The tax is settled with the KapESt deduction (Section 43 (5) EStG). The partial income method of Section 3 No. 40 EStG is not applicable to private assets. When applying the special tax rate according to § 32d EStG, the deduction of income-related expenses is not permitted. Only the flat-rate saver amount is deducted in accordance with Section 20 (9) EStG (Section 2 (2) sentence 2 EStG).

Fig .: Treatment of sales to corporations from 2009

In a letter dated December 16, 2014 (BStBl I 2015, 24), the BMF commented on the question of how income is assessed in accordance with Section 17 of the Income Tax Act (EStG) through the sale of holdings in listed companies held in domestic custody accounts that are realized prior to assessment the income is taken into account when the sale transaction is carried out by the custodian bank. Because through this a sale was recorded according to § 20 Abs. 2 Satz 1 Nr. 1 EStG and in the case of a capital gain a tax deduction according to § 43 Abs. 1 Satz 1 Nr. 9 EStG or, in the case of a sale loss, possibly a loss offsetting according to § 43a para. 3 EStG.

The treatment as a fact of sale according to § 20 Abs. 2 Satz 1 Nr. 1 EStG with capital gains tax withholding is to be corrected within the scope of the assessment, if it is determined that there is a capital gain or loss from a participation relevant according to § 17 EStG. In these cases, on the one hand, the investment income tax treatment by the custodian institution must be taken into account when assessing the income; on the other hand, the consequences of the reclassification of the income by the tax office must also be taken into account at the custodian institution.

Example 1:

A plug has a sales loss within the meaning of Section 17 EStG in the amount of Reaches € 1,000 and applies this to his income tax return. The custodian bank has taken the loss into account in the share loss pot in accordance with Section 20 Paragraph 2 Clause 1 No. 1 EStG.

Solution 1:

After submitting the confirmation of the FA by the Stpfl. if the custodian bank determines that the loss on sale is already amounting to € 200 has been offset against share profits. The custodian bank has in the amount of 800 € to make a correction in accordance with § 43a Paragraph 3 Clause 7 EStG and the taxpayer. the correction amount in the amount of € 800 and the excess of € 200 for which no correction could be made.

After submitting the confirmation, the FA takes into account a sales loss of € 1,000 in accordance with Section 17 of the Income Tax Act. The taxation of the share profits offset by the custodian bank in the amount of € 200 in accordance with Section 20 (2) Sentence 1 No. 1 EStG is made up for in the assessment in accordance with Section 32d (3) EStG.

Note:

In a ruling of March 12, 2014 (I R 45/13, BStBl II 2014, 719), the BFH clarified that when determining the capital gain within the meaning of Section 8b (2) KStG, selling costs must be taken into account. The BFH applies the definition of selling costs (Section 16 (2) EStG) developed by the case law on the Income Tax Act accordingly to Section 8b (2) sentence 2 KStG. Selling costs within the meaning of Section 8b (2) sentence 2 KStG include all expenses that are incurred through the sale of the shares. The exemption of profits from the sale of capital shares ordered in Section 8b (2) sentence 1 of the KStG relates to a net amount reduced by any sales costs, of which 5% are then treated as fictitious non-deductible operating expenses according to Section 8b (3) sentence 1 of the KStG ( see note from June 24, 2014, LEXinform 0652407).

3. Capital gains according to § 17 EStG

3.1. General

According to Section 17 (1) EStG, income from commercial operations also includes the profit from the sale of shares in a corporation if the seller has held a significant (1%) stake in the company's capital within the last five years.

3.2. Substantial participation

According to Section 17 Paragraph 1 Clause 4 of the Income Tax Act, a substantial participation existed if the seller had a direct or indirect participation of more than 25% in the company.

From January 1, 1999, the participation rate is still 10% (StEntlG 1999/2000/2002 of March 24, 1999, Federal Law Gazette I 1999, 402). The regulation applies from the assessment period 1999, but retrospectively also includes participation relationships that have already been established beforehand. According to the decision of the BVerfG of July 7, 2010 (2 BvR 748/05, 2 BvR 753/05, 2 BvR 1738/05, BStBl II 2011, 86), the retroactive application of the reduction in the participation quota is unconstitutional (see press release BVerfG No. 65 / 2010 from August 19, 2010, LEXinform 0435619 and note from November 13, 2012, LEXinform 0632980). The law violates the constitutional principles of the protection of legitimate expectations and is void insofar as increases in value are taxed in a capital gain that arose up to the announcement of the StEntlG 1999/2000/2002 on March 31, 1999 and which either - in the event of a sale up to this point in time - were realized tax-free according to the previously applicable legal situation or - in the case of a sale after the promulgation of the law - could have been realized tax-free both at the time of the promulgation and at the time of the sale according to the previously applicable legal situation. The BMF comments on the effects of the decision of the Federal Constitutional Court of July 7, 2010 in a letter dated December 20, 2010 (BStBl I 2011, 16) (see the example under C.II.1 of the BMF letter of December 20, 2010, BStBl I 2011 , 16). The BMF letter of December 16, 2015 (LEXinform 5235799) supplements the BMF letter of December 20, 2010 (BStBl I 2011, 6) under C.II.1 by stating that there is a proportional allocation of the selling costs within the meaning of Section 17 Para 2 EStG is not required. These are to be fully deducted from the taxable sales proceeds, taking into account Section 3c (2) EStG.

According to the BMF letter of December 21, 2011 (BStBl I 2012, 42), the principles of the BVerfG decision of July 7, 2010 are also applicable to cases of deposits according to Section 6 (1) no. 5 sentence 1 letter b EStG and contributions § 22 Paragraph 1 Clause 5 in conjunction with Paragraph 2 UmwStG to be applied accordingly (see Grübers, NWB 2012, 474). The BMF letter dated December 16, 2015 (LEXinform 5235800) changes the BMF letter dated December 21, 2011 (BStBl I 2012, 42) in A.I.1 and A.I.1a) so that a proportionate allocation of the selling costs is not required. These are to be fully deducted from the taxable sales proceeds, taking into account Section 3c (2) EStG.

To calculate the capital gain according to § 17 EStG, taking into account the reduction of the materiality limit to 1%, which has been partially declared unconstitutional, see the judgment of the FG Münster of August 22, 2013 (3 K 3371/11 E, EFG 2013, 1835, LEXinform 5015586, rkr. ). By BFH decision of February 26, 2014 (IX R 41/13, BFH / NV 2014, 881, LEXinform 0929900), the revision was rejected as inadmissible (see also note of November 19, 2013, LEXinform 0652255).

In its judgment of December 11, 2012 (IX R 7/12, BStBl II 2013, 372), the BFH commented on the assessment period-related concept of a substantial investment. The concept of participation in accordance with Section 17 (1) sentence 4 of the Income Tax Act as amended by the StEntlG 1999/2000/2002 is to be interpreted in relation to the assessment period, in that the element of the offense “has substantially participated in the company's capital within the last five years” in Section 17 (1) sentence 1 EStG for each completed VZ must be determined according to the participation limit applicable in this VZ (see BFH decision of February 24, 2012, IX B 146/11, BStBl II 2012, 335).

Facts and reasons for the decision:

The judgment was issued in a case in which the Stpfl. sold its stake in a corporation in December 1999. He held a 9.22% stake in the AG and in the previous years up to 13.52%.

According to Section 17 (1) EStG, the sale of shares was taxable if the seller had a significant stake in the company's capital within the last five years. The StEntlG 1999/2000/2002 reduced the materiality limit with effect from 1.1.1999 from more than 25% to at least 10%. Due to the retroactive decision of the BVerfG, FA and FG recorded increases in value from March 31, 1999 until the sale. It was questionable, however, whether profits were to be recorded, although the taxpayer. was never significantly involved in the respective DC.

The BFH answers this question in the negative. He interprets the concept of participation in relation to the assessment period. The materiality limit of at least 10% was first applied to VZ 1999 according to Section 52 (1) EStG. Conversely, this also means that it was not applicable to earlier VZ. Therefore, the sale was not taxable in the event of a dispute: The Stpfl. before 1999 had not more than 25% with a maximum of 13.52% and since 1999 with 9.22% not at least 10% and thus never had a significant share in the capital of the AG. This interpretation avoids a retroactive effect of the law from the outset (see also note of February 28, 2013, LEXinform 0943582).

According to the BMF letter of May 27, 2013 (BStBl I 2013, 721), the BFH judgment of December 11, 2012 (IX R 7/12, BStBl II 2013, 372) applies to all comparable cases in the area of ​​lowering the participation limit in § 17 EStG to apply from more than 25% to at least 10%. An analogous application to the reduction of the participation limit by the Tax Reduction Act of 23.10.2000 to 1% is not to be made.

Since the lowering of the participation limit to 1% by the StSenkG, according to the wording of § 17 Paragraph 1 Clause 1 EStG, a prerequisite for the fact that the Stpfl. »Held a direct or indirect participation of at least 1% in the company's capital within the last five years«. In contrast to the version of the StSenkG 1999/2000/2002 from VZ 1999, Section 17 (1) EStG in the version of the StSenkG no longer contains the concept of the materiality of the investment (see also note from 13.6.2013, LEXinform 0943891).

According to the StSenkG 2001, the participation rate is only 1%. Because of this reduction, the term “substantial” participation will be dispensed with in the future. With regard to the application of the 1% quota, the principles set out in the BMF letter of December 20, 2010 (LEXinform 5233064) regarding the effects of the BVerfG resolution of July 7, 2010 apply accordingly. The StSenkG of October 23, 2000 (Federal Law Gazette I 2000, 1435) was announced in the Federal Law Gazette on October 26, 2000.

In its judgment of October 24, 2012 (IX R 36/11 BStBl II 2013, 164), the BFH decided that the participation limit of 1% pursuant to Section 17 (1) sentence 1 EStG as amended by the Tax Reduction Act of October 23, 2000 (BGBl I 2000 , 1433) is constitutional. Profits from the sale of participations in a corporation held as private assets are taxable if the seller held at least 1% of the company's capital within the last five years (see BFH press release No. 04/13, LEXinform 0439094 and Intemann, NWB 2013, 828).

According to Section 17 (1) sentence 1 EStG, income from commercial operations also includes the profit from the sale of shares in a corporation if the seller has held at least 1% of the company's capital, either directly or indirectly, within the last five years. If the seller has acquired the sold share free of charge within the last five years prior to the sale, this shall apply in accordance with Section 17 Para.1 sentence 4 EStG, if the seller did not hold a direct or indirect share in the company's capital of at least 1% in the past five years, but the legal predecessor or, if the share has been transferred free of charge, one of the legal predecessors within the last five years. To take into account a loss from the sale of shares in a corporation acquired free of charge (donation of the corporation's share to a friend), the presumption to be assumed in contracts between third parties can be assumed for the existence of a paid transaction in the case of the transfer of a corporation share, for which the donor bears high acquisition costs should not be regarded as refuted solely because of a friendship between the donor and the recipient. The actual presumption that strangers do not give each other anything in business life can be refuted by the taxpayer (plaintiff) bearing the objective burden of proof (burden of determination) through direct evidence or with the help of circumstantial evidence. It must be taken into account that the above assumption turns out to be stronger, the more economically valuable the transferred company share is for the transferor and the recipient (BFH judgment of 9 May 2017, IX R 1/16, BFH / NV 2017, 1168).

3.3. Sale of capital shares in business assets

The provision of § 17 EStG does not apply to the sale of shares in corporations that are part of business assets. In this case, the sale is a business transaction (R 17 Paragraph 1 EStR).

3.4. Scope of application of § 17 EStG

Fig .: Scope of application of § 17 EStG

3.5. Participation within the meaning of Section 17 (1) EStG

3.5.1. Participations in private and business assets

When checking the 1% limit, investments in private and business assets must be added together.

Example 2:

A holds a stake in X-GmbH in the amount of 0.9% in private assets and a further participation in the amount of 0.6% in X-GmbH in the (voluntary) business assets.

Solution 2:

The sale of the 0.9% share held as private assets meets the requirements of Section 17 (1) sentence 1 EStG.

3.5.2. The five year period

To determine the five-year period, the provisions of the BGB must be observed (→ Deadlines and dates).

Fig .: Five-year period

3.5.3. Company's own shares

The company's own shares are to be deducted from the share capital (H 17 (2) [Own shares] EStH).

Example 3:

A, B and C each have a stake of € 2,250 in X-GmbH's share capital of € 250,000. The GmbH owns own shares amounting to € 30,000.

Solution 3:

A, B and C each hold more than 1% of the share capital of € 220,000.

In a judgment of December 6, 2017, the BFH decided that at the level of the selling shareholder, the purchase of own shares by the GmbH for a consideration represents a sale within the meaning of Section 17 (1) EStG (confirmation of the BMF letter of November 27, 2013, BStBl I 2013 , 1615, margin no. 20 sentence 1). The purely internal reclassification of a free revenue reserve into a dedicated reserve does not lead to subsequent acquisition costs for the share of the selling shareholder (BFH dated December 6, 2017, IX R 7/17, LEXinform 0951280).

Facts and decision:

In 2010 a GmbH reclassified an amount of approx. € 100,000 from the free (profit) reserve into a dedicated reserve for the acquisition of own shares by the GmbH. In 2011 the sole shareholder (claimant) sold its shares with all profit participation rights for undistributed profits and all other ancillary rights on the one hand to a third party and on the other hand to the GmbH. In the opposition proceedings, the plaintiff argued in support of her legal opinion that the profit from the acquisition of own shares was not subject to taxation, that the acquisition of own shares by the GmbH was not an acquisition process, but a capital reduction. The changed treatment of own shares by the BilMoG affects the determination of taxable profits due to the principle of relevance. The reserve for financing the acquisition of own shares is to be deducted from the sale proceeds as acquisition costs.

The BFH found, however, that the purchase of own shares by the GmbH for a fee, also from the point of view of the shareholder (plaintiff) that is decisive in the case of dispute, constitutes a sale within the meaning of Section 17 of the Income Tax Act. The reserve formed by the GmbH for the acquisition of its own shares does not reduce the capital gain achieved by the plaintiff when the share was sold to the GmbH. The purely internal reclassification of a revenue reserve into a dedicated reserve does not lead to subsequent acquisition costs for the share of the selling partner, since this process does not affect the position of the partner towards the company. Because at the time of the reclassification, the shareholder has no entitlement to a profit distribution due to the lack of a profit distribution resolution. Such a reclassification cannot be equated with an external capital injection by the shareholder. The commercial law changes resulting from the BilMoG at the company level do not contain any new regulations with regard to the shareholder level at issue here alone.

3.5.4. Entitlements within the framework of § 17 EStG

An entitlement to participation in a corporation is not a participation and is therefore not to be taken into account when determining the participation amount within the meaning of Section 17 (1) sentence 1 EStG. Explains the Stpfl. due to the payment of a sum of money his claims from a share purchase are settled, this payment is not taxable according to § 22 No. 3 EStG (BFH judgment of February 19, 2013, IX R 35/12, BStBl II 2013, 578; note of July 4, 2013 , LEXinform 0943941).

3.5.5. Special features of Section 17 (6) EStG

The regulation of Section 17 (6) EStG means that in certain cases, shares below the participation limit are also subject to tax under Section 17 EStG if they were acquired on the basis of a transfer process within the meaning of UmwStG (Eilers / R. Schmidt in H / H / R, EStG, § 17, margin number 360). The contribution process within the meaning of Section 17 (6) EStG is the one within the meaning of Section 20 or Section 21 UmwStG.

Introduction process

§ 20 UmwStG

Contribution in kind (margin no.20.01 of the VAT decree of 11.11.2011, Federal Tax Gazette I 2011, 1314).

§ 21 UmwStG

Exchange of shares (margin no. 21.01 VAT exemption).

Contribution of a business, part of a business or a co-entrepreneur's share in a corporation against the granting of new shares.

Exchange of shares in a corporation against the granting of new shares in the acquiring corporation.

Valuation of the shares:

Valuation of the shares:

Section 20 (2) sentence 1 UmwStG:

Section 20 (2) sentence 2 UmwStG:

Section 21 (1) sentence 1 UmwStG:

Section 21 (1) sentence 2 UmwStG:

Approach with the common worth.

Upon request, the acquired business assets can be valued uniformly at book value or a higher value, but at most at the common value.

Approval with the common value (margin no. 21.07 UmwSt-ErwSt-Abitur).

It is a qualified share swap (see also margin no.21.09 of the VAT exemption).

Approval at book value or a higher value, at most with the common value, upon request.

Not a case of Section 17 (6) EStG.

Section 17 Paragraph 6 No. 1 and No. 2 Alt. 2 EStG.

Not a case of Section 17 (6) EStG.

Section 17 Paragraph 6 No. 1 and No. 2 Alt. 1 EStG.

The new shares are also tax-entangled in private assets within the meaning of Section 17 (1) sentence 1 EStG if the participation in the corporation is less than 1%.

At the time of contribution, the requirements of Section 17 (1) sentence 1 EStG must have been met for the contributed units, i.e. the units were private assets and subject to tax.

Fig .: Insertion process

When selling shares in corporations, it must be checked whether the sale falls under Section 17 of the Income Tax Act, i.e. whether the shares are subject to tax under Section 17 of the Income Tax Act.

Fig .: Tax arrest according to § 17 EStG

For the taxation of the shareholder see § 22 UmwStG, margin no. 22.01 ff and the example in margin no. 22.04 of the VAT decree.

3.5.6. Asset management partnership

Shareholdings in an asset management partnership are to be proportionally allocated to the partners of the partnership for the purpose of determining the facts of the sale in accordance with Section 17 of the Income Tax Act (so-called fractional consideration). A consequence of the fractional analysis is, among other things, that capital gains according to § 17 EStG are neither the subject of a uniform and separate determination according to § 180 para. 1 no. 2 letter a AO nor - in the case of a sub-participation - the subject of the special determination procedure according to § 179 para. 2 Sentence 3 AO can be. This applies even if a shareholder has a significant stake in the corporation due to the amount of his stake in the partnership and the amount of the equity stake belonging to the total assets according to § 17 EStG (BFH judgment of 9 May 2000, VIII R 41/99, BStBl II 2000, 686; see H 17 (2) [Total handheld assets] EStH).

The OFD Frankfurt commented on the facts of the sale in asset management partnerships with the ordinance of 7 August 2014 (S 2256 A - 41 - St 213, DStR 2014, 1832, LEXinform 5235200).

3.6. Capital gain

3.6.1. Determination of the capital gain

The → capital gain from § 17 EStG results from the sale price minus the selling costs and the acquisition costs (§ 17 para. 2 sentence 1 EStG). In the case of sales, 40% of the sales price is tax-free according to § 3 No. 40 letter c EStG and 60% is taxable. According to Section 3c (2) EStG, only 60% of the acquisition and sale costs can be deducted. The BMF letter dated November 8, 2010 (BStBl I 2010, 1292) comments on the application of the partial income method in determining taxable profits.

The capital gain is formed from the difference between the selling price and the acquisition costs. Shares in a corporation are acquired by purchasing them against payment. Transferred the Stpfl. In the absence of a change in legal entity, he does not acquire shares in his private assets and does not purchase them either. Beyond the wording of the law, however, the withdrawal is to be equated with a purchase if hidden reserves have actually been recorded. Otherwise, in the event of a subsequent sale, contrary to the legal intention, increases in value would be recorded again and thus twice (BFH judgment of April 13, 2010 (IX R 22/09, BStBl II 2010, 791).

3.6.2. Creation of the capital gain

The capital gain arises at the time of the sale, regardless of whether the purchase price is deferred (BFH judgment of July 20, 2010, IX R 45/09, BStBl II 2010, 969). This is usually the point in time at which the legal or at least economic ownership of the shares sold has passed to the purchaser. According to the established case law of the BFH, the transfer of beneficial ownership of corporation shares presupposes that the beneficiary can exercise all essential rights associated with the participation, i.e. in addition to the right to profit and participate in changes in the value of the shares, all administrative rights including voting rights (BFH judgment of 18.5. 2005, VIII R 34/01, BStBl II 2005, 857). The inflow principle of Section 11 (1) sentence 1 EStG does not apply. The outflow principle of Section 11 (2) sentence 1 of the Income Tax Act (EStG) also does not apply to the selling costs. The origin of the guilt is also decisive here.

With regard to the transfer of beneficial ownership in the event of the sale of shares, the BFH decided the following in its judgment of July 22, 2008 (IX R 74/06, BStBl II 2009, 124): If the parties to a share purchase agreement determine the purchase price initially only provisionally set in the year in which the agreement was concluded, based on a An appraisal report to be drawn up only in the following year and if the transfer of ownership is dependent on the full payment of the purchase price, beneficial ownership of the shares does not yet pass to the purchaser upon conclusion of the purchase contract. For the transfer of a GmbH share subject to reservation of usufruct see below the subsection »Reserved usufruct in a substantial participation within the meaning of § 17 EStG and the subsequent replacement«.

In the case of shares in corporations, the acquirer becomes the beneficial owner if he

  1. has already acquired a legally protected position aimed at acquiring the right on the basis of a legal transaction under civil law, which can no longer be withdrawn against his will, and

  2. the essential (administrative and property) rights associated with the share (in particular profit-sharing rights and voting rights) as well as

  3. the risk of a decrease in value and the chance of an increase in value have passed to him.

A transit acquisition under civil law (in the form of a logical second) does not necessarily result in a transit acquisition under tax law in the sense of having beneficial ownership in the person of the transit acquirer under civil law; rather, the tax allocation is to be assessed in accordance with Section 39 (2) No. 1 AO. For the determination of beneficial ownership within the meaning of Section 39 (2) No. 1 AO, what is economically wanted and what is actually achieved are decisive, i.e. concrete, actual circumstances; Therefore, a - not real - logical second as a mere conceptual auxiliary construction for such an actual determination is irrelevant (BFH judgment of January 26, 2011, IX R 7/09, BStBl II 2011, 540 as well as comment of April 21, 2011, LEXinform 0940512).

To calculate the liquidation gain from a participation in a corporation acquired and sold in a foreign currency, both the acquisition costs and the sales price at the time of their respective occurrence are to be converted into euros and not just the balance of the sales gain / sales loss calculated in foreign currency at the time of the sale ( BFH judgment of January 24, 2012, IX R 62/10, BStBl II 2012, 564; note of April 12, 2012, LEXinform 0941557).

If the value of the consideration changes after the consideration obligation has been fully fulfilled, this no longer affects the amount of the sale price. This is different only if the legal reason for the later change was already created in the original legal transaction (BFH IX R 7/18 of 4.2.2020, LEXinform 0951870) a defect inherent in the sale process itself. A subsequent performance that is the subject of an independent legal transaction that is not factually related to the sale of shares does not affect the time of sale. If the counter-performance obligation has already been fully met with the granting of a stock option right, the subsequent exercise of the option right is usually no longer part of the original legal transaction and then does not have any retroactive effect on the point in time at which the capital gain was generated.

3.6.3. Loan losses as subsequent acquisition costs

According to Section 17 (1) sentence 1 EStG, income from commercial operations also includes profits from the sale of shares in a corporation. According to Section 17 (2) sentence 1 EStG, this is the amount by which the selling price after deducting the selling costs exceeds the acquisition costs. Acquisition costs are, according to Section 255, Paragraph 1, Clause 1 of the German Commercial Code (HGB), expenses incurred in order to acquire an asset. According to Section 255, Paragraph 1, Clause 2 of the German Commercial Code (HGB), this also includes subsequent acquisition costs. In addition to (hidden) deposits, the subsequent acquisition costs of a participation also include subsequent expenses on the participation if they are caused by the corporate relationship and are neither income-related expenses for income from capital assets nor sales costs. This is the case with a loan from the shareholder to the corporation if and to the extent that it replaces equity (cf. § 32a (1) GmbHG in the version up to October 31, 2008) because the shareholder grants it at a point in time (crisis), in which he would have added equity as a proper businessman (BFH judgment of May 25, 2011, IX R 54/10, BFH / NV 2011, 2019, LEXinform 0928220).

The examination of when the crisis occurred and when the shareholder became aware of it can be dispensed with if the shareholder declares at an earlier point in time with binding effect to the company or the company's creditors that he will leave the loan in the crisis will. This applies in any case if the declaration was made in the context of a contractual agreement.Because a lender who is not also a partner would generally not be willing to make such a declaration, given the extraordinary right of termination that he regularly has when his repayment claim is jeopardized. If the shareholder defaults on such a "crisis-ridden" loan when the company is dissolved, this generally leads to subsequent acquisition costs for the participation in the amount of Face value of the loan. This is based on the consideration that in the case of "crisis-determined" loans, the commitment already occurs with the waiver of ordinary and extraordinary termination at the time of the crisis and therefore the loss of the loan is based on this waiver and not only on the subsequent legal consequences of the crisis is based.

The BMF letter of 8 June 1999 (BStBl I 1999, 545) comments on the loan loss of a shareholder significantly involved in the sense of § 17 EStG. According to this, certain loan losses are to be treated as subsequent acquisition costs of the participation in accordance with Section 17 (2) EStG. See also the BFH rulings of April 24, 1997 (VIII R 16/94, BStBl II 1999, 339 and VIII R 23/93, BStBl II 1999, 342), of November 4, 1997 (VIII R 18/94, BStBl II 1999, 344) and 11.11.1998 (VIII R 6/96, BStBl II 1999, 348). The judgments were made under GmbH law before the MoMiG came into force on November 1, 2008. For cases in which the provisions of the MoMiG (law for the modernization of GmbH law and for combating abuses of November 1, 2008, Federal Law Gazette I 2008, 2016) apply to the treatment of the loan, the BMF letter of October 21, 2010 applies (BStBl I 2010, 832). A loan is to be treated according to the provisions of the MoMiG if the insolvency proceedings at a GmbH were opened after October 31, 2008 or if legal acts that are subject to contestation according to § 6 AnfG were carried out after October 31, 2008 (see also note from November 11, 2008) .2010, LEXinform 0940067). The BMF letter of 8 June 1999 (BStBl I 2009, 545) continues to apply to the other loans.

In order to take account of subsequent acquisition costs within the scope of Section 17 EStG as a “retroactive event” within the meaning of Section 175 (1) No. 2 AO, the BFH ruled on June 16, 2015 (IX R 30/14, BFH / NV 2015, 1715, LEXinform 0950074 ) decided that the change of a final income tax assessment according to § 175 Abs. 1 Satz 1 Nr. 2 AO due to a retrospective event does not preclude that the circumstances on which the event affects (here: sale of a qualified participation, incurrence of subsequent acquisition costs ) was not taken into account in the exit notification.

The event must occur retrospectively, because only in this case is there a need to break through the permanent force. If the event could already be taken into account when the relevant decision was issued, the provision does not apply.

As the BFH has repeatedly decided, the determination of profits according to Section 17 (2) EStG is not to be carried out according to the inflow principle of Section 11 EStG, but according to a key date assessment of the point in time at which the profit or loss occurred (BFH judgment of July 1, 2014, IX R 47/13, BStBl II 2014, 786, under II.1.a). This does not change the fact that after the sale of a participation, expenses may still be incurred that represent subsequent acquisition costs of the participation within the meaning of Section 17 (2) sentence 1 EStG. This can be the case if a capital shareholder has given the company an equity-replacing loan and fails with this loan after the company has been sold or dissolved. Such subsequent acquisition costs must be taken into account when determining the profit in accordance with Section 17 (2) sentence 1 EStG at the time of the sale. It is then a subsequent event that affects the amount of the profit on the sale or liquidation and must be withdrawn from the time of sale or liquidation. The event affects the tax liability of the year of sale or dissolution and must be taken into account in accordance with Section 175 (1) sentence 1 no. 2 AO (see also comments from October 27, 2015, LEXinform 0947285 and October 30, 2015, LEXinform 0880097).

Note:

The law on further tax incentives for electromobility and the amendment of other tax regulations (Annual Tax Act 2019) was used to define the acquisition cost concept in the sense of the § 17 EStG a new paragraph 2a inserted:

»Acquisition costs are the expenses incurred in order to acquire the shares as defined in paragraph 1. The acquisition costs also include the ancillary costs and the subsequent acquisition costs. The subsequent acquisition costs within the meaning of sentence 2 include in particular

  1. open or hidden deposits,

  2. Loan losses, insofar as the granting of the loan or the abandonment of the loan was caused by company law during the crisis of the company, and

  3. Failure of guarantee recourse claims and comparable claims, insofar as the surrender or the abandonment of the security in question was caused by company law.

A cause under company law is usually present if a third party pays the loan or security funds within the meaning of No. 2 or 3, all other things being equal, would have reclaimed or not granted. Does the Stpfl. Payments into the company's capital beyond the nominal amount of its shares, when determining the acquisition costs, are to be divided equally between all of its shares, including the new shares received as part of capital increases. "

The new Section 17 (2a) of the Income Tax Act is in accordance with Section 52, Paragraph 25a, Clause 1 of the Income Tax Act (EStG) on sales or in cases equivalent to sales to be applied from April 1st, 2019 (Day after the cabinet decision of July 31, 2019). At the request of the Stpfl. Section 17 (2a) sentences 1 to 4 EStG (but not Section 17 (2a) sentence 5 EStG) can also apply to sales before the cut-off date (Section 52 (25a) sentence 2 EStG). This ensures that the Stpfl. Loan losses can continue to be taken into account in a profit-reducing manner in accordance with Section 17 of the Income Tax Act and, if the stake is less than 10%, they are not locked in a separate loss accounting group as part of the income from capital assets.

3.6.4. Reversal of the sale

In economic life it happens again and again that mandatory contracts are concluded, but in which the transfer of property under property law or the assignment of rights fails. More often, withdrawal rights with reversal regulations are included in a sales contract. In its judgment of December 6, 2016 (IX R 49/15, BFH / NV 2017, 945, LEXinform 0950813), the BFH dealt with the reversal and resale of shares and the associated determination of the acquisition costs (see also note of May 26, 2017 , LEXinform 0880257).

A co-partner of two GmbHs sold his shares in December 08 for approx. € 10.5 million to an AG. The purchase price was deferred, but ultimately not paid by the purchaser. In March 11, therefore, the reversal of the purchase agreements with the reassignment of the shares took place. A capital gain was then no longer recorded in the 08 income tax assessment. Finally, in year 16, after the shareholder's death, his widow finally sold the shares to a third party. The widow assumed that the GmbH shares had been acquired again in March 11 and the purchase price was paid by offsetting the deferred previous sales price. As a result of the increased acquisition costs, the profit on the sale of the year 16 fell significantly to approx. € 1.9 million.

The Grand Senate of the BFH decided on Section 16 (2) of the EStG (BFH of July 19, 1993, GrS 2/92, BStBl II 1993, 897) that only the profit actually made on sale matters. This requires that changes that occur later in the originally agreed sale price must be withdrawn from the point in time of the sale in terms of material and law as long as the purchaser has not yet fulfilled his obligation to pay the purchase price. It is irrelevant which reasons were decisive for the reduction or increase in the (actually achieved) proceeds. The same applies to the determination of the selling price within the meaning of Section 17 (2) EStG.

In a further development of this case law, the BFH has decided that for the valuation of the material goods received as consideration (sale price), the circumstances at the time of the fulfillment of the consideration obligation are important if they differ from the circumstances at the time the gain on sale was generated.

This case law expressly concerns only circumstances that have an impact on the level of the selling price. However, it is to be transferred to the question of whether an acquisition process is basically to be assumed. The case that the sales price is retroactively canceled in full, is to be treated in the same way as the case that the sale is reversed as a whole. This is required by the purpose of Section 17 of the Income Tax Act (EStG) to only record the capital gain actually achieved. According to this, there is basically a retroactive reversal for tax purposes and no sale / acquisition if the original contract was not yet fully fulfilled by both parties at the time of the reversal. On the other hand, it is irrelevant whether the contract was reversed due to a service disruption and whether a service disruption really existed. This does not constitute an inadmissible breach of the principle according to which a situation in tax law that has once been realized cannot be mutually reversed. This exception is justified in Section 17 of the Income Tax Act and the reference date consideration given there.

According to case law, something else applies if the consideration has been fulfilled in full. A reversal of the contract after this point in time only has a material and legal retroactive effect if the legal reason for the later change was in the original legal transaction.

If a capital gain has already arisen, the retroactive tax reversal of the transaction has the effect that the capital gain is retroactively canceled. At the same time, this excludes treating the process of reversing the transaction as a purchase from the perspective of the original seller.

The BFH judgment of January 31, 2017 (IX R 26/16, BFH / NV 2017, 952, LEXinform 0950979) on the transfer of shares in closed Real estate funds see BFH judgments of 6.9.2016, IX R 44/14, BFH / NV 2017, 191, IX R 45/14, BFH / NV 2017, 197 and IX R 27/15, BFH / NV 2017, 202 and also below → Private sales transactions.

3.7. Allowance

According to Section 17 (3) EStG, an allowance is granted. The capital gain is only included in the income tax to the extent that it exceeds the portion of € 9 060 that corresponds to the share in the corporation that has been sold. The tax exemption is reduced by the amount by which the capital gain exceeds the part of € 36,100 that corresponds to the share in the corporation that has been sold.

If 100% of the share capital is thus sold, the tax exemption is € 9,060. If only a part is sold, e.g. 50% of the share capital, the tax exemption is 50% of € 9,060 = € 4,530 in accordance with the shares sold. For example, if 50% of a 30% stake is sold, the tax exemption is 15% of € 9 060 = € 1 359.

Sells the Stpfl. In the same assessment period, shares in different corporations, the exemption is to be granted separately for each sale and the various profits. Sells the Stpfl. Shares in the same corporation several times in the same assessment period, the sales are added together.

3.8. Application of the partial income method

3.8.1. Temporal scope

With regard to taxation, the regulations of Section 3 No. 40 and Section 3c, Paragraph 2 of the Income Tax Act (→ half-income method) must be observed. For the rules of application, see → Breakdown of equity and → Half-income method. The BMF letter dated November 8, 2010 (BStBl I 2010, 1292) comments on the application of the partial income method in determining taxable profits.

Example 4:

A plug sells a 50% stake in a GmbH on June 30, 2010 for € 145,100. The selling costs are € 500. The Stpfl has the shares. Acquired on February 1, 2008 for € 100,000.

Solution 4:

The partial income method is to be used for the sale in fiscal year 2010. The capital gain according to Section 17 (2) EStG is determined as follows:

Sales proceeds

145 100 €

according to § 3 No. 40 letter c EStG tax-free 40%

58 040 €

taxable 60%

87 060 €

less acquisition costs

100 000 €

Disposal costs

500 €

a total of

100 500 €

40% are not deductible (Section 3c (2) EStG).

40 200 €

deductible 60%

./. 60 300 €

Capital gain exemption according to Section 17 (3) sentence 1 EStG: 50% of € 9 060 =

4 530 €

26 760 €

./. Reduction in Section 17 (3) sentence 2 EStG:

Capital gain

26 760 €

./. 50% of 36 100 €

18 050 €

Exceeding part of the capital gain

8 710 €

8 710 €

remaining allowance

0 €

0 €

remaining capital gain

26 760 €

3.8.2. Disposals for recurring services

The BMF letter of August 3, 2004 (BStBl I 2004, 1187) adopts the half-income method for the sale of holdings in corporations for recurring services where the taxpayer. has chosen the inflow taxation, detailed position.

In a judgment of July 20, 2010 (IX R 45/09, BStBl II 2010, 969), the BFH takes a position on the assessment of the sales price within the meaning of Section 17 (2) EStG for recurring services.

Selling price within the meaning of Section 17 (2) EStG is the value of the consideration that the seller receives by concluding the real sale transaction on the relevant key date; this includes everything that the seller receives from the sale transaction in return. The sales price is generally to be set regardless of whether the sale is conditional or limited or whether the purchase price has been deferred. The relevant point in time for the valuation of the selling price is generally that of the closing of the sales transaction; it does not depend on the payment received.

If a participation within the meaning of Section 17 (1) sentence 1 EStG is sold for an annuity or for a purchase price to be paid in installments, the provision in R 16 (11) EStR should apply accordingly in accordance with R 17 (7) EStR. Sells a Stpfl. his business in return for an annuity, he can then immediately tax the profit made on the sale or treat the pension payments as subsequent operating income within the meaning of Section 15 in conjunction with Section 24 No. 2 EStG.

Insofar as purchase price installments are to be equated with life annuities, this can only apply to cases in which the purchase price installments are at least similar to an annuity in terms of their supply character, i.e. it is not a mere installment deferral of the purchase price; In any case, the installment payment must be agreed for a period of more than ten years.

According to the BFH case law, a right to choose is particularly possible if long-term recurring payments are agreed and these are either fraught with risk or mainly in the interests of the seller, to secure his supply, and not in the interests of the purchaser. In its judgment of July 20, 2010 (IX R 45/09, BStBl II 2010, 969), the BFH makes it clear that the care nature of the installment payments is reflected in the answer to the question of whether a total or partial loss of the claim could be taken into account . In the case of risky recurring payments with the character of a pension, which are usually linked to the life of a specific person, the realization of the proceeds from the sale does not lead to a retroactive change in the proceeds of the sale when the pension beneficiary dies. If, however, the purchase price claim is not paid in installments, the taxable capital gain changes retrospectively (BFH judgment of July 19, 1993, GrS 2/92, BStBl II 1993, 897).

In its judgment of November 18, 2014 (IX R 4/14, BStBl II 2015, 526), ​​the BFH once again issued an opinion on the application of inflow taxation when selling a significant investment within the meaning of Section 17 (1) EStG. The BFH confirms the right to choose between immediate taxation and ongoing taxation of pension payments (see BFH judgment of July 20, 2010, IX R 45/09, BStBl II 2010, 969) and approves this regulation contained in R 17 (7) EStR if the long-term recurring payments are of a supply nature and are subject to a risk (note from April 24, 2015, LEXinform 0880038).

Contrary to the administrative opinion represented in the BMF letter of August 3, 2004 (BStBl I 2004, 1187), the BFH decided in its judgment of November 18, 2014 (IX R 4/14, BStBl II 2015, 526) that if the Stpfl . for inflow taxation, the taxation is based on the law applicable at the time of inflow. This means that the key date principle is suspended in these cases. Regardless of the time of sale, the half-income method is to be applied from VZ 2002 and from VZ 2009 the partial income method, provided that the payment at the time of inflow leads to the break-even point being exceeded.

The principles of the BMF letter of August 3, 2004 (BStBl I 2004, 1187) are therefore outdated and no longer need to be observed. The key date principle is only applicable to the sale of shares within the meaning of Section 17 of the Income Tax Act against recurring payments with the optional choice of the taxpayer. to be observed for immediate taxation (OFD Lower Saxony dated November 13, 2015, S 2244 - 96 - St 244, DB 2015, 1693, LEXinform 5235782).

In its judgment of November 18, 2014 (IX R 4/14, BStBl II 2015, 526, margin nos. 14 and 15), the BFH was able to leave open whether the pension payments should be divided into an interest and a repayment component. The case law has not yet accepted this (Schmidt / Wacker, EStG, 34. A., § 16 Rz. 245). On the other hand, the tax authorities generally carry out the division, but starting from different points in time. For sales before 1.1.2004, the tax authorities (R 139 Paragraph 11 Sentence 7 EStR 2001) assume that a breakdown is only to be made after the acquisition and sale costs have been fully offset against the pension payments (without splitting) (R 139 Para. 11 sentence 8 EStR 2003; R 16 para. 11 sentence 8 EStR 2012). For sales after December 31, 2003, the pension payments should be divided from the beginning (R 16, Paragraph 11, Clause 7 of the Income Tax Regulation 2012). The breakeven point will then be reached correspondingly later. In the literature, it is doubted whether there is a legal basis for the allocation of subsequent income within the meaning of Section 15 in conjunction with Section 24 No. 2 EStG.

Fig .: Sale of shares in corporations for an annuity

Example 5:

Werner (59 years old) sells his stake in a GmbH on 1.5.12 in return for an annuity to be paid in advance from 1.5.12. € 32,000 annually. The present value of the pension as of 1.5.12 is: Annual value 32,000 € × duplicator 12.914 according to the annex (BMF of 26.9.2011, BStBl I 2011, 834) = 413 248 €

The acquisition costs were € 59,000.

Solution 5:

According to R 16 para. 11 EStR (R 17 para. 7 sentence 2 EStR), Werner has the right to choose between immediate taxation of the capital gain and taxation of the current pension payments as subsequent operating income.

Immediate taxation

Calculation of the capital gain:

Present value of the pension

413 248 €

40% is tax-free (§ 3 No. 40 letter c EStG) = 165 299 €

60% is taxable

247 949 €

less 60% of the acquisition costs (Section 3c (2) EStG)

./. 35 400 €

Taxable gain on sale (subsequent income from commercial operations § 17 in conjunction with § 15 EStG)

212 549 €

According to the table in Section 22, No. 1, Clause 3, Letter a, the earnings share is double-letter. bb EStG 23% of € 32,000

7 360 €

and represents this amount of income from § 22 No. 1 sentence 3 letter a double letter. bb EStG.

There is no tax exemption in accordance with Section 17 (3) of the Income Tax Act, as the (pro rata) meltdown limit (€ 36 100) is exceeded by more than the possible (pro rata) tax exemption (€ 9 060).

Inflow taxation

As soon as 60% of the acquisition costs of the participation plus 60% of the selling costs are exceeded by the 60% repayment portion of the pension payments, taxable subsequent income from commercial operations is available.

The annual pension is

32 000 €

The interest portion according to the table in § 22 No. 1 sentence 3 letter a double letter. bb EStG amounts to € 7 360 and represents this amount of income from § 22 No. 1 sentence 3 letter a double letter. bb EStG.

./. 7 360 €

Repayment portion

24 640 €

40% is tax-free (§ 3 No. 40 letter c EStG) = € 9 856

60 %

14 784 €

is to be offset with 60% of the acquisition costs

35 400 €

Taxable repayment portion in calendar year 12

0 €

Taxable interest component =

7 360 €

In the case of recurring payments, the tax exemption is granted if the seller opts for immediate taxation. If the seller chooses the inflow taxation, it is disputed whether an allowance is granted. See Hörger in Littmann ESt Comment, § 17 margin no. 285. According to this, the tax exemption is not to be granted, since the current emoluments are taxed as subsequent income according to § 24 No. 2 in conjunction with § 17 and § 15 EStG in the year of the accrual.

Note:

The capital values ​​of a lifelong use or service are determined

  • from 1.1.2010 according to the BMF letter of 1.10.2009 (BStBl I 2009, 1168),

  • from 1.1.2011 according to the BMF letter of 8.11.2010 (BStBl I 2010, 1288),

  • from 1.1.2012 according to the BMF letter of 26.9.2011 (BStBl I 2011, 834,

  • from 1.1.2013 according to the BMF letter of 26.10.2012 (BStBl I 2012, 950),

  • from 1.1.2014: according to the BMF letter of 13.12.2013 (BStBl I 2013, 1609), the values ​​from 2013 also apply to 2014,

  • from 01/01/2015: according to the BMF letter of 11/21/2014 (DB 2014, 2744, LEXinform 5235288), the values ​​from 2013 also apply to 2015;

  • from 01/01/2016: according to the BMF letter of 02/02/2015 (BStBl I 2015, 954).

Fig .: Sale of shares in corporations against purchase price installments

Note:

According to the case law of the BFH, purchase price installments are to be broken down into a repayment and an interest component if an item belonging to private assets is sold and the purchase price claim is deferred for more than a year. In its judgment of June 25, 1974 (VIII R 163/71, BStBl II 1975, 431), the BFH decided that purchase price installments should regularly be discounted in accordance with Section 12 (3) BewG even if the contracting parties have expressly excluded interest. In contrast, the BFH has determined in more recent decisions regarding the question of the taxation of an interest component for recurring services that the fact that a service is not to be provided in one amount but in recurring payments cannot justify its taxability (BFH judgment of 9.2. 2010, VIII R 43/06, BStBl II 2010,818 and VIII R 35/07, BFH / NV 2010, 1793).

According to the judgment of the FG Düsseldorf of October 22, 2014 (7 K 451/14 E, LEXinform 0442665, revision according to BFH decision of August 17, 2015, VIII R 55/14 inadmissible.), The taxation of an interest component is subject to the principle of taxation according to the contrary to economic performance. If the payments made over the contract period essentially correspond to the nominal value of the capital claim, a capital transfer against payment is to be denied. If there is no transfer of capital against payment, there is no interest obligation in accordance with Section 20 (1) No. 7 EStG.

See also the section "Sale against installment payments" under → Sale of business.

Example 6:

Werner (59 years old) sells his 100% stake in a GmbH on 1.5.12 in return for a purchase price to be paid in advance in 11 equal annual installments from 1.5.12. € 32,000 annually. Interest is not agreed. The installments were agreed to provide W with a supply. The acquisition costs in fiscal year 2006 were € 50,000.

Solution 6:

It is a sale of a relevant participation in a corporation within the meaning of Section 17 of the Income Tax Act. Section 16 (1) no. 1 sentence 2 EStG is ruled out as the shares are not BV. These are shares that were acquired before January 1, 2009. According to Section 52a (10) sentence 1 EStG, Section 23 (1) sentence 1 no.2 EStG (old version) would still have to be applied for the sale (see also Section 52a (11) sentence 4 EStG). According to Section 23 (2) sentence 2 EStG old version, Section 23 EStG takes precedence over Section 17 EStG. Section 23 of the Income Tax Act is ruled out, however, as the sale does not take place within one year of acquisition.

According to R 16 para. 11 EStR (R 17 para. 7 sentence 2 EStR), Werner has the right to choose between immediate taxation of the capital gain and taxation of the current installment payments as subsequent operating income.

Immediate taxation

Calculation of the capital gain:

Present value of the installment according to Table 2 to Section 12 BewG: € 32,000 × 8.315 =

266 080 €

40% is tax-free (§ 3 No. 40 letter c EStG) = € 106,432

60% is taxable

159 648 €

less 60% of the acquisition costs (Section 3c (2) EStG)

./. 30 000 €

Taxable capital gain (subsequent income from business operations)

129 648 €

An exemption is out of the question because of the amount of profit.

According to the table in § 55 EStDV, the income share is 13% of € 32,000

4 160 €

and represents this amount of income in accordance with Section 20 (1) No. 7 EStG.

The interest component can also be determined according to Table 2 of Section 12 BewG. See the calculation under inflow taxation.

Inflow taxation

As soon as 60% of the acquisition costs of the participation plus 60% of the selling costs are exceeded by the 60% repayment portion of the installment payments, taxable subsequent income from commercial operations is available.

The annual rate is € 32,000.

The annual installments are to be divided into a repayment and an interest portion according to table 2 of § 12 BewG:

year

inflow rate

NPV at the beginning

NPV at the end

Repayment portion / 60% portion

60% acquisition cost

Difference between the 60% repayment portion and the remaining 60% acquisition costs

Interest portion (Section 20 (1) No. 7 EStG)

Tax liability according to § 17 in conjunction with § 3 No. 40 letter c EStG

12

32 000

266 080

247 840

18 240 / 10 944

30 000

19 056

13 760

0

13

32 000

247 840

228 576

19 264 / 11 558

30 000

7 498

12 736

0

14

32 000

228 576

208 288

20 288 / 12 172

30 000

./. 4674

11 712

4 674

15

32 000

208 288

186 848

21 440 / 12 864

30 000

0

10 560

12 864

16

32 000

186 848

164 256

22 592 / 13 555

30 000

0

9 408

13 555

17

32 000

164 256

140 416

23 840 / 14 304

30 000

0

8 160

14 304

18

32 000

140 416

115 264

25 152 / 15 091

30 000

0

6 848

15 091

19

32 000

115 264

88 704

26 560 / 15 936

30 000

0

5 440

15 936

20

32 000

88 704

60 704

28 000 / 16 800

30 000

0

4 000

16 800

21

32 000

60 704

31 168

29 536 / 17 721

30 000

0

2 464

17 721

22

32 000

31 168

0

31 168 / 18 701

30 000

0

832

18 701

total

352 000

266 080/159 646

85 920

129 646

plus 60% acquisition costs

30 000

total

159 646

plus repayment portion

266 080

total

352 000

For the sale of businesses, partial businesses or co-entrepreneurial shares in exchange for pensions, see → pensions and → business sale.

3.8.3. Sale of a 100% stake in a GmbH

According to Section 16 (1) No. 1 Sentence 2 EStG, the sale of a 100% stake in a GmbH is treated as equivalent to the sale of a part of the business. The tax exemption regulation of Section 16 (4) of the Income Tax Act applies to the sale of a part of the business. The tariff reduction of Section 34 Paragraph 1 and / or Paragraph 3 EStG is not applicable due to the application of the partial income method (Section 34 Paragraph 2 No. 1 EStG).

The profits from the sale of a 100% participation in a GmbH are subject to the trade tax (H 7.1 (3) profit from the sale of a 100% participation in a corporation] trade tax). However, there is no trade tax if the 100% stake is sold or withdrawn in connection with the sale or abandonment of a commercial enterprise.

A sale within the meaning of Section 16 (1) no. 1 sentence 2 EStG is given if the entire participation is transferred to an acquirer in return for payment. Retaining even a minor portion is detrimental to a favorable sale.

The participation must be 100% in the business assets - necessary or voluntary business assets.

According to Section 16, Paragraph 3, Clause 1 of the Income Tax Act (EStG), there may also be a favored partial abandonment of the business (see H 16 (3) [withdrawal of a participation] income tax). The simultaneous sale of the 100% stake to several buyers within a reasonable time is a favored task (Wacker in Schmidt, ESt comment § 16 margin no. 164, 34th edition 2015). A preferential part of the business is also given if the 100% stake is partially sold and partially transferred to private assets (see also Hörger / Rapp in Littmann ESt Comment, § 16 Rz. 59, loose leaf).

Example 7:

Werner (59 years old) sells his 100% stake in XY-GmbH on 1.5.12, which he holds as part of the business assets of his business (acquisition costs = book value € 240,000). The purchase price in the amount of € 460,000 is due immediately. The selling costs borne by Werner amount to € 10,000. Werner has never received an allowance under Section 16 (4) EStG.

Solution 7:

Profits from the sale of 100% equity stakes within the meaning of Section 16 Paragraph 1 Sentence 1 No. 1 Sentence 2 EStG are subject to the partial income procedure (Section 3 No. 40 Letter b Sentences 1 and 2, Section 3c Paragraph 2 EStG).

Section 16 (4) EStG is also applicable if parts of the capital gain are subject to the partial income procedure. In this respect, the exemption is only deducted from the remaining profit after the exemption (Section 3 No. 40, Section 3c (2) EStG) (R 16 (13) sentence 10 EStR).

The taxable capital gain (Section 16 (2) EStG) is calculated as follows:

Selling price

460 000 €

tax-free according to § 3 No. 40 letter b sentence 1 EStG: 40%

./. 184 000 €

taxable

276 000 €

276 000 €

./. Book value

240 000 €

not deductible 40%

./. 96 000 €

deductible according to § 3c para. 2 EStG 60%

144 000 €

./. 144 000 €

Selling costs, deductible 60%

./. 6 000 €

Capital gain according to § 16 Abs. 2 EStG:

126 000 €

./. Exemption according to § 16 Abs. 4 EStG (unabridged)

./. 45 000 €

Taxable capital gain

81 000 €

4. Transfer of GmbH participations within the framework of the anticipated succession among relatives

4.1. Donation

In the case of a transfer free of charge in full, the transferee continues the acquisition costs of the legal predecessor (see Section 17 (1) sentence 4 and (2) sentence 5 EStG; Section 11d (1) EStDV).

If the transferring stake represents business assets, the transfer free of charge leads to a withdrawal of the GmbH stake. The subsequent transfer as part of the anticipated succession takes place in private assets (BMF of 13.1.1993, BStBl I 1993, 80, margin no. 33).

In the case of share transfers between related persons (siblings), for which the remuneration to be paid, considering the worthlessness of the share, is € 0, a sale within the meaning of Section 17 of the Income Tax Act and not a gift can only be assumed if, based on the overall picture of the objective circumstances Taking into account the will and ideas of the contracting parties, it is certain that the transferred portion is worthless both objectively and in the eyes of the contracting parties (BFH judgment of April 8, 2014, IX R 4/13, BFH / NV 2014, 1201 There are indications that the parties involved have only concluded this agreement in appearance, there is no room for the deviating assumption of a subjective evaluation with a value higher than € 0, regardless of the personal motives for the transfer and takeover of the transfer item by the purchaser (BFH of 3.8.2016, IX R 23/15, BFH / NV 2017, 289 No. 3).

Note:

A constitutional complaint is pending before the BVerfG against the BFH ruling of 8 April 2014 (IX R 4/13, BFH / NV 2014, 1201) under Az. 2 BvR 1653/14 (LEXinform 0934977).

4.2. Transfer against payment of a one-time fee

4.2.1. Basics