If you own a GmbH and leave Germany, this means for you that you usually have to pay at least a six-figure (!) amount in taxes. No joke. Most people don't know this.

So what is the German exit tax and how is it calculated?

First, a quick example:

Sounds absurd? It is. Feel free to read on for explanations on the individual points!

Put simply, the German exit tax consists of you having to "virtually sell" your company when you move away from Germany.

There are quite a few assumptions in there now... so one thing at a time. First of all, you fall under the German exit tax if you own more than 1% of a company. The most common case here is if you have your own GmbH. But other constellations also fall under this:

In reality, this condition is likely met if you have your "own" GmbH, although as mentioned, you only need to own more than 1% of this GmbH to fall under the German exit tax. So you can own 50%, 33%, or even 1.1%; for the exit tax, this doesn't really matter, since everything is more than 1%; the percentage figure is only relevant at the end for calculating the amount of tax.

And how is the exit tax then calculated?

To put it very simply, the exit tax is calculated using the so-called "simplified capitalized earnings method" and the "partial income method". The simplified capitalized earnings method works by multiplying your company's annual profit by a factor of 13.75 (a very high factor!) and that gives you your company value.

Quick calculation example:

So in case you didn't know - the tax office assumes that with your small GmbH you are basically a millionaire, since the tax office uses an absurdly high factor (13.75 * profit) for the valuation of your GmbH.

And you can't easily change that for now (more on that in other articles).

So - now your "small" company is worth €1.375 million - what does that mean for your exit tax?

Here again, simplified: You have to pretend that you are selling your company at the time of your move and pay taxes on this "sale". The "funny" thing here is, of course, that you haven't actually sold your company, but the tax office simply assumes you have.

So you pay the taxes you would have to pay if you had sold your company at an absurdly high price (13.75 * profit), but the joke is that you didn't sell it at all. Since there was no sale, you basically have to finance these taxes from your savings.

Corporate sales are, to put it simply again, taxed using the partial income method, i.e., you pay your personal income tax rate on 60% of the earnings. Let's assume for a calculation example that you are already receiving a salary of approx. €70k this year, so your marginal tax rate is already at 42%. From an income of €250k, however, your marginal tax rate will rise again to 45%, so let's calculate with that:

So you have to pay €364,500 as soon as you leave Germany. No joke.

That is the German exit tax. Pretty absurd, right?

I had to deal with the German exit tax for quite a while in 2025 because I wanted to move away from Germany. The interesting thing is that there are quite a few, partly just as absurd, ways to avoid the exit tax. I myself was quite annoyed by the general lack of transparency on this topic at the time - for much of it, I had to book (expensive) consultation hours with tax advisors.

To enable other entrepreneurs to solve the problem with the exit tax more easily in the future, I thought I would share my notes here on this website then :)

Enjoy reading!