Sell company shares, pay no exit tax
🇩🇪 Auf deutsch:
Unternehmensanteile verkaufen, keine Wegzugsteuer zahlen
Okay, ready for probably the simplest solution ("structuring") for the German exit tax? Simply sell your company shares. If this is an option for you, it can be one of the easiest ways to pay no exit tax.
In Brief
- Before moving out of Germany, you sell all shares where you hold more than 1% of the respective corporations (international companies included!).
- Your profit is taxed at just under 30% (partial income method: 60% taxed at 42-45% individual income tax rate).
- After that, you no longer possess shares >1% in corporations and you move out of Germany. You pay no exit tax.
In Detail: Selling a company because of the German exit tax
Selling your company or your company shares is certainly one of the most drastic "solutions" to the German exit tax. However, it can definitely be a good solution, provided you were thinking about a potential sale of your shares anyway.
Let's look at a concrete numerical example! Let's first assume we would not sell our shares and thus pay the German exit tax. Let's further assume we hold 100% of a GmbH that makes €100k annual profit:
Let's look at a concrete numerical example! Let's first assume we would not sell our shares and thus pay the German exit tax. Let's further assume we hold 100% of a GmbH that makes €100k annual profit:
- Exit tax: €100k profit * 13.75 valuation factor * 0.6 * 0.45 taxes (partial income method) = ~€360k exit tax.
So you would have to pay approx. €360k in exit tax when moving out of Germany. - Tax advisor fees: €5k per company --> here 1 * €5k.
Every company you hold must be valued by a tax advisor (simplified capitalized earnings method), which costs another approx. €5k per company. So here another €5k in costs comes your way.
So in total, an exit tax of approx. €365k.
The problem here is, of course, that you haven't received any money (liquid funds)! You practically have to pay the €365k from your savings or take out a loan or agree to a 7-year installment plan with the tax office - none of which are particularly attractive options.
Let's look at a sale of your company as an alternative.
Example: Sale of a GmbH before moving out of Germany
First, we would assume that your company is not valued by the tax office with the absurd factor of 13.75 * annual profit, but rather with a customary market factor of 4-5. So let's take 4, then your company value would be approx. €400k.
And now further assuming you find a buyer for your company who buys it from you for €400k. Then the calculation would look something like this:
The problem here is, of course, that you haven't received any money (liquid funds)! You practically have to pay the €365k from your savings or take out a loan or agree to a 7-year installment plan with the tax office - none of which are particularly attractive options.
Let's look at a sale of your company as an alternative.
Example: Sale of a GmbH before moving out of Germany
First, we would assume that your company is not valued by the tax office with the absurd factor of 13.75 * annual profit, but rather with a customary market factor of 4-5. So let's take 4, then your company value would be approx. €400k.
And now further assuming you find a buyer for your company who buys it from you for €400k. Then the calculation would look something like this:
- €400k sales proceeds
- -€25k acquisition costs (incorporation of the GmbH etc.)
- = €375k profit
- On that again 0.6 * 0.45 taxes --> €375k * 0.6 * 0.45 = €101.25k taxes
- = €273.75k that remains for you.
It is now relatively hard to say whether this is "good" or "bad". As tax advisors like to say (with whom I have spoken plentifully): It depends. Besides that, however, a few advantages can be noted:
Advantages of selling a company for exit tax structuring:
- Your "total tax burden" is lower: In our example, you pay "only" approx. €101k instead of €365k in taxes. This is precisely because you are actually selling your company and "the market" values your company for it, namely your buyer. And they most likely use a factor that is much lower than the one from the tax office (e.g. 4-5 instead of 13.75).
Or, put another way: With the exit tax, the tax office pretends that you have sold your company and taxes your profit on it. The tax office values your company extremely high. Instead, you can simply really sell it and implicitly value it lower through a lower purchase price. As a result, you pay less tax (but have actually sold your company). - You pay the taxes from liquid funds: In other words, you get money (your sales proceeds) and can pay the taxes from it (partial income method etc.). So you don't have the problem that you might have to take out a loan for the exit tax or have to agree to an installment plan etc.
- No bureaucracy when moving away and upon potential return: Since you now no longer own shares in corporations, the "tax bureaucracy" when moving away turns out to be very simple. You simply declare your move normally with your income tax return in the year you moved away. Since you do not own shares in corporations, you do not have to submit anything regarding your (former) companies. You move away just as uncomplicatedly as someone who is "only" an employee in Germany and owns no company shares.
The same applies to your return - theoretically, you get the exit tax reimbursed if you return within 12 years, but that is irrelevant for you since you did not pay exit tax.
And the same again with repeated moves - provided you continue not to own corporations, that also turns out to be simple again. It only gets complicated, of course, if you then start to incorporate abroad again and then e.g. return to Germany again and then want to move away again - then you might have an exit tax again, since the exit tax also applies to foreign holdings.
And here are the disadvantages:
- You are selling your company: Relatively obvious disadvantage. You should only sell your company if you have already thought about it independently of your move. It makes little sense to sell your company, then move away, and then realize that you would like to continue working on your company.
- Paying exit tax can sometimes be worth it after all: There is the theoretical case that your company is actually worth more than the tax office assumes with the factor of 13.75. Then again, it would theoretically be worth paying the exit tax, moving out of Germany, and then selling the company at a higher price (e.g. factor 20) - this sale would not be taxed in Germany, that was indeed the reason for the introduction of the exit tax.
In reality, this should only happen e.g. with startups that grow quickly and thus justify a higher valuation. And even there it is questionable whether the tax office then also accepts the simplified capitalized earnings method (factor 13.75), as I have heard anecdotes that the tax office also looks at the valuation in the last investment round for Venture Capital (VC) investments. Then this advantage would fall away. - Hard to do with multiple holdings: If you hold several small stakes (e.g. 1-20%) in companies, it should become increasingly difficult to sell them all before your move.
- Also hard to do with holding companies: If you have a holding company (e.g. German Holding-GmbH), it gets complicated again. For one, it becomes relatively difficult to find a buyer for your holding company - instead, your holding company would probably first have to sell all its holdings and then you would subsequently have to liquidate the holding and withdraw all profits beforehand (26% capital gains tax). Sounds like quite a lot of effort. Here, setting up a KG-Holding can be worthwhile, as its holdings (put simply) do not fall under the exit tax.
Summary: Selling the company
To repeat it again: The biggest aspect here is certainly that you should only do it if you wanted to sell your company anyway, independently of your move.
So if that is an option for you, it can definitely represent a valid solution for your exit tax. Ideally, you therefore only hold shares in one company (operating company, no Holding-GmbH) and already have a buyer.
In most other cases, in which you e.g. hold multiple stakes and/or already have a holding company, this model likely won't be an option - there one would then probably resort to a more complex construct like a KG-Holding.
So if that is an option for you, it can definitely represent a valid solution for your exit tax. Ideally, you therefore only hold shares in one company (operating company, no Holding-GmbH) and already have a buyer.
In most other cases, in which you e.g. hold multiple stakes and/or already have a holding company, this model likely won't be an option - there one would then probably resort to a more complex construct like a KG-Holding.
By the way: Join our Telegram community to exchange ideas with other people who have solved the German exit tax for themselves!
Dr. Oliver Eidel
Ich bin Oliver und bin Unternehmer aus Deutschland - mein bekanntestes Unternehmen ist OpenRegulatory, welches eine Compliance-Software für Medizinprodukte-Hersteller anbietet.
Seit 2025 musste ich mich mit der deutschen Wegzugsteuer auseinandersetzen, da ich nach Thailand auswandern möchte. Auf dieser Webseite teile ich meine Erkenntnisse, die ich mir relativ mühsam durch (teure) Gespräche mit Steuerberatern erarbeiten musste. Hoffentlich spare ich dir dadurch Zeit und Steuerberatergebühren! :)
Seit 2025 musste ich mich mit der deutschen Wegzugsteuer auseinandersetzen, da ich nach Thailand auswandern möchte. Auf dieser Webseite teile ich meine Erkenntnisse, die ich mir relativ mühsam durch (teure) Gespräche mit Steuerberatern erarbeiten musste. Hoffentlich spare ich dir dadurch Zeit und Steuerberatergebühren! :)