First Contact

Pricing Model

Consultation

• When renting out German real estate in private ownership, one remains subject to limited tax liability, i.e., one continues to pay German taxes on rental income (submit annual tax return, etc.).

• Generally speaking, the valuation of company shares could become difficult here, as foreign companies often lack sufficient bookkeeping etc. One might need to consider this - but perhaps also no problem, depends on the bookkeeping.

• Idea #1: For the German operating GmbH, one could simply increase the managing director's salary to €120k-150k / year; this would reduce the valuation to almost zero, since the GmbH "only" has an annual profit of around €100k. Sounded like a good suggestion and makes sense - other tax advisors recommended this to me as well.
• Idea #2: Alternatively, one could make a so-called "asset deal" with a non-related person - so if you have, for example, a good friend (male or female), you could sell the company's assets to this person (who would have to found a company beforehand for this, ideally abroad). The German company would subsequently "only" have money in the account and no more objects (assets). The money would then be taxed as profit and paid out.
  Later, when you are abroad, the friend would transfer the company to you. Here one would have to check if there would be gift tax in the destination country.
  The advantage of the model is that, although one has to tax the earnings from the asset sale in Germany, one can virtually reduce the valuation here, since the friend does not necessarily have to pay an extremely high price for the assets. Since this is a transaction between unrelated third parties (and e.g. not between family members), a low price would not be a problem here.
  The disadvantage of the model is that one temporarily hands over a large part of one's assets to another person. The risk can possibly be reduced contractually, but it naturally remains a considerable disadvantage.
• Couldn't one simply do the asset deal with oneself after moving away? My idea here was that one pays the exit tax (low valuation, managing director salary, etc.) and then, as soon as one is abroad, founds a company there that buys the assets of the German GmbH.
  Apparently, however, this is not a very good idea, as the tax office looks more closely at such transactions where the owner / shareholder is involved on both sides; furthermore, such transactions must be declared in the annual financial statements.
  He said that it might also be an option to leave the GmbH in Germany, if e.g. no huge growth were foreseeable.
• Idea #3: I could found a Holding - GmbH & Co. KG. This is one of the common solutions for exit tax, but associated with further costs. Among other things, one needs a German managing director, substance in Germany (office, etc.) and must be "commercially active" in the original sense. Furthermore, a GmbH & Co. KG is a prerequisite if one later wants to transfer one's GmbH into a Liechtenstein foundation - apparently a GmbH pays German exit tax during such a process, while a GmbH & Co. KG does not (why?).
  Nevertheless, the running costs of the GmbH & Co. KG deterred me here and actually I don't want to found yet another German company.
• Idea #4: Found a foundation in Liechtenstein and transfer the GmbH (or rather the new Holding - GmbH & Co. KG) there. The foundation costs €20-30k / year, as the "trustee" charges accordingly (you are not allowed to "own" the foundation yourself) (I later learned in conversations with other advisors that the price can certainly be negotiated down to approx. €10k / year). An advantage of the Liechtenstein foundation is that it pays no capital gains tax on dividends, so initially you only have the 30% tax burden on profit in the GmbH (corporate tax etc.) but then no further taxes upon distribution into the foundation. However, as long as you are tax resident in Germany, you naturally still pay 26% capital gains tax upon distribution from the foundation to yourself.
  A further prerequisite here is that the Holding-GmbH & Co. KG holds at least 25% of the individual GmbHs so that they can be transferred into the foundation without problems (?).
• Idea #5: Value the company low and have the exit tax deferred. The idea here actually came from me, not from him. But he said it would be feasible (but seems to have little experience with it). If one moves away, has an intention to return and returns within 11 years (as I described here), one gets the exit tax refunded. I also asked him if one pays deferral interest here - he wasn't sure and in the end said "no". According to my research, one does pay it however - perhaps another data point that he rarely or never implements this solution for their clients.

• What would he do in my situation? --> Depends on how long I move away and if I might want to return. The tax return for the exit year is only due approx. 1.5 years later, i.e., one could still move back within the 1.5 years and pay no exit tax (since one gets it refunded immediately - I described this in detail here).
• Can one keep one's apartment? --> Power of the keys is decisive, i.e. one could sublet it, for example. As long as one doesn't have the keys oneself anymore, that would be okay.
• What is the official date of the move - only when one is tax resident elsewhere (e.g. 180 days elsewhere) or as soon as one leaves Germany? --> The date of deregistration in Germany.
• What happens if one does not become tax resident anywhere (digital nomad)? --> Theoretically one then remains tax resident in Germany, not a very good situation. A grey area probably exists if one becomes tax resident elsewhere according to the double taxation agreement, but for various reasons receives no certificate for it there.
• Does the tax office then demand a confirmation annually that I am tax resident elsewhere and pay taxes there? --> Not as far as he knows. One might have to fill out a questionnaire from the tax office annually confirming one's place of residence etc. But (as far as he knows) one does not have to attach documentation listing e.g. the taxes paid abroad.

Summary & Impression: Juhn Partner

Update: Offer