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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

#131

Post by jorams »

refurb wrote: post #118
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 se…

> as far as I'm aware, it simply taxes you on all assets as if you disposed of them the day you leave.

That is also what Germany does. The 13.75 multiplier is the fallback number used if there is no valuation for the company. It's such an irrelevant number that tax advisers writing about the topic don't even bring it up. Get a valuation.

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

#132

Post by probably_wrong »

WalterBright wrote: post #122
littlestymaar wrote: post #112

Earlier quoted context omitted.

Yes, it means you have opened the capital, goods and service market way too much and businesses are now abusing that to avoid their basis civil duties.

The best civic thing a business can do is provide a valuable service and thereby make money. Just look at all the wonderful things we have as a result - airplanes, internet phones, air conditioning, cars, agriculture, movies, AI - the list is endless.

The Internet evolved from Arpanet, a network established by DARPA. Given that was created by a government agency, and therefore funded by the same taxes companies are trying to avoid, I'd argue that it's a great example for why companies should indeed follow their civic duties and pay their taxes.

It's also worth pointing out that many of those "wonderful things" had to be regulated by governments due to how bad their business practices and environmental effects are when pursuing making money. Sure, we have cars, but that's coming from the same industry that brought us leaded fuel and global warming.

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

#133

Post by xenospn »

kanbara wrote: post #125
malthaus wrote: post #124

you could have shortened your advice to: "leave germany"

not sure how useful this is. germany is a great place to live, safe, with great infrastructure and access to europe, good food, lots of personal freedoms, orderly society, few overtouristic’ed cities, and a thoughtful populace for the most part.

Also: absolutely beautiful, with great people.

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

#134

Post by merek »

csomar wrote: post #103
merek wrote: post #61

There's a note at the end > You could, of course, sell or wind down your company, which would solve all problems outlined here. But this is not an option for most entrepreneurs. For a software business, you could presumably: - Incorporate a company in your country of choice - Transfer subscribers from German company to new foreign company (depending on payments provider, this can be a massive effort, for example, not…

This is fraud and you'll end up in jail. Your company is not "you". You are a shareholder but as a CEO, you should do what's best for the "company" and what you described is criminal activity to bankrupt the company.

It's not bankruptcy if the company has no liabilities. You're allowed to wind down a profitable company because you can't be bothered running it any more.

A question of legality might come from German authorities determining if this is solely to avoid tax, which is open-ended. It might be hard for them to make this argument if you can prove you transferred operations to country X to maximize company's growth, access local talent, closer proximity to customers etc.

Regardless, anther commenter pointed out that the exit tax applies to all companies that you own regardless of location. In that case, the approach isn't feasible.

Also it goes without saying, seek your own legal advice rather than trusting random comments on the internet.

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

#136

Post by bmacho »

geff82 wrote: post #126

The crazy thing is that as a business owner (GmbH/AG) you can’t even move to another EU country any more since 2022. As the owner of such a company it feels like I have become a slave of the government.

Why can't businesses be owned by people that:

  - enjoy owning and managing a business
  - do think that owning and managing a business should come with the same compensation as any other dayjob (hairdresser or whatever)
While managing a large amount of money naturally lead people to have enough to buy luxury items, IMO, this is just a sad fact of our world, and we should fight against it.

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

#137

Post by anonzzzies »

geff82 wrote: post #126

The crazy thing is that as a business owner (GmbH/AG) you can’t even move to another EU country any more since 2022. As the owner of such a company it feels like I have become a slave of the government.

Why is that? It has been the case for a very long time for taxation; the decision gravity has to be in the where the company is. But curious if this is something else as 2022 is too recent for this.

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

#140

Post by cc62cf4a4f20 »

I'm unsure how strange this is. As a Canadian, when I left the country I had to undergo what's termed a deemed disposition - i.e., pretend you sold all your assets and then pay the relevant taxes on the net gains you've enjoyed to that point. This includes proposing a value for any companies that are not publicly traded. See: https://www.canada.ca/en/revenue-agency/services/tax/interna...
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