Optimizing your tax structure
A sound tax structure supports sustainable growth and resilience without being a burden for the company or individual. This is especially important for start-ups or companies that want to move into international markets.
We go beyond compliance to identify potential risk factors, inefficiencies, uncover hidden potential, and design personalized structures that minimize tax leakage while aligning with your business goals.
Whether you’re a startup, an established corporation or an individual with investment structures, we offer insights that will help you to stay compliant and optimize your strategy.
I’m founding a start-up. Should I hold the shares in the company directly or via a holding entity?
It can be very beneficial from a tax perspective to hold the shares via a holding entity (e.g. a German GmbH or UG). In case of a future exit, a holding structure comes with the benefit of a possible tax exemption (when structured correctly), which can lead to an effective taxation of c. 1.5% at the level of the holding company, which would not be available when holding the shares directly.
The direct sale of the shares on the other hand leads to a taxation of c. 26.4% in most cases. The liquidity advantage of a holding GmbH or UG can be utilized for further investments. Repatriation of the gains from the holding entity in the future can then also be optimized.
We can support you in finding the best structure for your personal situation and proactively plan tax efficient cash repatriations in the future.
Our current structure no longer serves our company's purpose, and I also want to add a personal holding structure. Is a restructuring possible without triggering German taxes?
Depending on your situation, it is generally possible to not trigger any German taxes when restructuring your company and when implementing a personal holding structure retroactively, utilizing specific clauses of the German Transformation Tax Act. These come with very specific requirements prior, during and after the transformation.
We can support you in finding the best ways to achieve your goals from a tax perspective and ensure compliance along the way. Small mistakes during a transformation, such as the establishment of retroactive holding structures, can result in a material tax burden, without generating any income (i.e. risk of dry income).
Should I establish a partnership or a corporation?
A partnership is a form of business in which at least two individuals join together to operate a business jointly. The partners contribute capital, labor, or tangible assets. Common types include the civil-law partnership (GbR), the general partnership (OHG), and the limited partnership (KG), which mainly differ based on the liability of the partners (i.e. unlimited or limited liability). Taxation of a partnership usually takes place at the level of the shareholders on their personal tax returns (trade tax and value added tax at the level of the partnership itself).
A corporation is a form of business in which liability is generally limited to the company’s assets. The shareholders are generally not personally liable, but only with their capital contribution. Common types include the limited liability company (GmbH) (including the special form of the GmbH, the UG) and the stock corporation (AG). Taxation generally takes place at the level of the corporation itself.
We are happy to provide you with personalized advice to help you choose the right legal form from a tax perspective and, in this context, develop a tax-efficient structure tailored to your needs.