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Exit Tax: Leave Germany before your business gets big

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Re: Exit Tax: Leave Germany before your business gets big

#111

Post by v5v3 »

WalterBright wrote: post #108
v5v3 wrote: post #100

Earlier quoted context omitted.

Not necessarily. As USA is the main destination for IPO, wouldn't many German companies naturally leave? Also once you are successful you can afford to pay the costs to arrange the companies affairs in a tax efficient manner e.g. utilise low tax regions with the EU such as Luxembourg and wider world.

> As USA is the main destination for IPO Why do you think that might be? Perhaps the Germans could make their IPOs more business friendly, so they have no reason to flee.

Germany is a smaller country with 70 million people or so. USA has multiples of that at 300million people or so.

Many companies will float in New York but also have secondary listings in their home country.

If they created a single EU wide stock market it would compete much better.

Re: Exit Tax: Leave Germany before your business gets big

#113

Post by johannesberlin »

neves wrote: post #41

[flagged]

As someone running a business in germany, they do everything but encourage small businesses. It is extremely painful to run a business in this country, it has archaic systems and the only reason I’m successful is because of surrounding european countries like Netherlands who handle 90% of my products with efficiency.

I do not rely on most suppliers here as they are far behind in their systems (relying on phone calls, hidden prices and slow response times).

The other half of my business is successful is because of America, I use suppliers there to ship directly to my customers for environmental reasons.

Trust me when I say, I run a business despite being here and there’s nothing that they do to “encourage us”. I’m just stubborn.

Re: Exit Tax: Leave Germany before your business gets big

#114

Post by wolfgangK »

Scarblac wrote: post #98
akersten wrote: post #3

Is there a look back period? What stops me from selling my business to my buddy the day I leave and then buying it back the day after?

The idea is that leaving the country is taxed as if you sold your shares. So selling them presumably doesn't help.

The idea is presumably that you would "sell" at an artificially low price.

Re: Exit Tax: Leave Germany before your business gets big

#115

Post by refurb »

da_chicken wrote: post #91
tastyfreeze wrote: post #86

Earlier quoted context omitted.

Dumb American here but that sounds like a few steps too far in employee protections. A business can't even die without government approval?

It's not dumb. You're not allowed to close a business in the US until you check a lot of boxes, too. You have to show you don't have outstanding debts and so on. The banks won't let you do that because it's an easy way to escape debt. That's exactly why bankruptcy is an extended legal process. If an employee is guaranteed X months salary upon notice of layoff in the contract, that's debt you have to resolve before yo…

You're confusing "winding a business down" with "bankruptcy" in the US.

As long as you follow the law, there is no government "approval" of a dissolution. You notify shareholders and creditors, then resolve any outstanding payments, then dissolve.

Re: Exit Tax: Leave Germany before your business gets big

#116

Post by refurb »

jmyeet wrote: post #92

The developed world is increasingly facing a funding crisis brought on by this propaganda that if we tax corporations and the very wealthy then they'll leave. One of the most farcical examples of this is the decades-long race to the bottom on business taxes and incentives between Kansas City, Missouri and Kansas City, Kansas. For the non-Americans out there, this is basically one city but it sits at the border of two…

> I'm really sick of this "the businesses will leave" propaganda.

I don't think anything you've said convinces me it's propaganda.

Businesses are profit-seeking ventures. They will optimize their operations to maximize profits.

So I'm not sure why you'd call it "propaganda" to say that companies will leave. I think the evidence is that they will.

Of course, taxes are not the only variable in a profit-maximizing formula. US companies aren't going to flee in mass if Somalia decides to have zero corporate taxes. But you can't ignore that companies will optimize their operations and structure if they can lower taxes.

Re: Exit Tax: Leave Germany before your business gets big

#117

Post by croes »

rvz wrote: post #95

I wasn't joking at all when I previously said in [0], moves like this is how to lose and now this is another reason why tech founders do not start companies in Europe and when a company gets too big, especially in Germany. Just don't be surprised to see a decline in tax revenue when countries like Germany chase the wealth creators out of the country with high taxes + exit taxes. [0] https://news.ycombinator.com/item?…

Wealth creators?

I would attribute that term to the workers who work 1.3 billion hours overtime, most of them unpaid

https://dailywrap.net/en-gb/unprecedented-unpaid-overtime-re...

And then the company owner whine when they habe to pay their share?

Re: Exit Tax: Leave Germany before your business gets big

#118

Post by refurb »

dismalaf wrote: post #28

Canada also has an exit tax. For individuals as well as businesses.

It's an exit taxes, but as far as I'm aware, it simply taxes you on all assets as if you disposed of them the day you leave.

That doesn't seem particularly unfair. If you can image a scenario where someone buy Apple at $1, and it's now worth $1,000. They just leave Canada, pay no tax, then sell in a low tax jurisdiction.

However, it can be a massive pain in the ass for illiquid assets or assets you don't intend to sell at that point in time. A good example might be a pension. Getting hit with a tens of thousand dollar tax bill for a pension you won't receive for another 2 decades is painful.

Re: Exit Tax: Leave Germany before your business gets big

#119

Post by woodpanel »

> People say Germany is a good country for being an employee, and this is also true for exit tax.

Which proves again that regulatory environment is downstream from culture: In a country like Germany, with Europe’s lowest share of entrepreneurs/workforce, there is very little political emphasis on creating comfortable environments for the out-group.

Most Germans can’t relate to these people at all, and every awareness campaign have to incorporate teaching the target audience (in order to make them understand the problem in the first place). A meticulous, tenacious, undertaking one can imagine that immediately gets stomped once the political gravy train comes around full steam with anti-capitalist or otherwise hyperbolic rhetoric.

(I haven’t looked but would bet that adherents to this rhetoric are already at it even in the comments here, pointing out how deserved the exit tax is etc)

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