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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

#381

Post by diggan »

pc86 wrote: post #375
nolverostae wrote: post #201

I was someone who almost got hit by this tax. You don't need any offshore shenanigans to get around it. If you just want to move out of the country you can also just keep the ownership of the company within the country. You do this by putting your shares into a holding that stays in Germany even when you move out. That holding needs to be managed within Germany, so you need to assign a friend or be in Germany twice a…

No reasonable person on the planet can look at that table showing a €700k exit tax on a company making €200k/yr profit and think "yeah that sounds fair."

That's because reasonable people don't just look at two numbers and go "That's crazy", there is context and nuance to be understood, so give reading the entire blog post through instead of just skimming tables, and come back and tell us why it's unfair.

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

#382

Post by pc86 »

nolverostae wrote: post #282
throw9349494 wrote: post #230

Earlier quoted context omitted.

> be in Germany twice a year to sign off on having done the management within Germany. Pretty stupid. You are signing paper that claims you never left Germany!!! You are opening up yourself to personal German tax residency, with all pleasures it brings. Payable 10 years back! And do not believe that 185 days bs. Correctly losing tax residency in state like Germany, Denmark, Norway or Australia is very difficult. You…

> You are signing paper that claims you never left Germany!!! No you aren't. You are signing a paper that says a managerial decision about the shares of the company happened in Germany. Where you live does not matter. You just have to do a board meeting, and be physically present in Germany during the meeting. In fact, you likely want to keep any proof of your travel from a different country, which makes it obvious t…

Someone should tell the German government about the internet. Who cares where you physically are?

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

#383

Post by GavinMcG »

pc86 wrote: post #375
nolverostae wrote: post #201

I was someone who almost got hit by this tax. You don't need any offshore shenanigans to get around it. If you just want to move out of the country you can also just keep the ownership of the company within the country. You do this by putting your shares into a holding that stays in Germany even when you move out. That holding needs to be managed within Germany, so you need to assign a friend or be in Germany twice a…

No reasonable person on the planet can look at that table showing a €700k exit tax on a company making €200k/yr profit and think "yeah that sounds fair."

The article admits that the 700k figure “assumes the worst-case scenario that you take the high valuation of the financial authorities (factor 13.75) as base valuation for your exit tax. Instead, you could also find someone to assess the real value of your company, which is likely lower…”

A reasonable person could absolutely think it’s fair to impose a very high exit tax on someone who doesn’t want their books examined even when it would save them money.

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

#384

Post by pc86 »

diggan wrote: post #381
pc86 wrote: post #375

Earlier quoted context omitted.

No reasonable person on the planet can look at that table showing a €700k exit tax on a company making €200k/yr profit and think "yeah that sounds fair."

That's because reasonable people don't just look at two numbers and go "That's crazy", there is context and nuance to be understood, so give reading the entire blog post through instead of just skimming tables, and come back and tell us why it's unfair.

It's a math problem - you don't need a ton of context to understand it (although I did read the entire article). This is simply the German government being petulant and punishing successful people for moving a company somewhere that understands how to create proper incentive structures for businesses to grow.

If you as an individual make €100k a year in salary, saved €20k every year, and the German government wanted to charge you €70k just to move out of Germany it'd be grounds for rebellion.

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

#385

Post by tcfhgj »

u_sama wrote: post #341
tcfhgj wrote: post #245

Earlier quoted context omitted.

> cherry on top: Germany has been in recession for… 3 years now? no?

Idk what world you live in, but Germany has clearly been in recession, unemplyment rose over the last few years and the rest of the Eurozone is in a similar condition

stagnation != recession

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

#386

Post by Xylakant »

nolverostae wrote: post #282
throw9349494 wrote: post #230

Earlier quoted context omitted.

> be in Germany twice a year to sign off on having done the management within Germany. Pretty stupid. You are signing paper that claims you never left Germany!!! You are opening up yourself to personal German tax residency, with all pleasures it brings. Payable 10 years back! And do not believe that 185 days bs. Correctly losing tax residency in state like Germany, Denmark, Norway or Australia is very difficult. You…

> You are signing paper that claims you never left Germany!!! No you aren't. You are signing a paper that says a managerial decision about the shares of the company happened in Germany. Where you live does not matter. You just have to do a board meeting, and be physically present in Germany during the meeting. In fact, you likely want to keep any proof of your travel from a different country, which makes it obvious t…

If your company bylaws are set up properly, you can do board meetings via video calls just fine.

Very few acts require actual presence in the country. What is required is that you can, at any time, enter Germany to perform those acts - which shouldn’t be a problem if you are German Citizen.

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

#387

Post by lenerdenator »

jacquesm wrote: post #246
jillesvangurp wrote: post #225

Earlier quoted context omitted.

Exactly, you need to get proper advice on how to structure your business in Germany. Basically, putting your shares in holding companies is both common and not dodgy. Corporate taxes are more friendly than personal income taxes. You can do constructions with salaries, dividend, etc. Doing this is standard practice if you are founding a company. You need to plan for your startup to be actually successful and being on…

> this is a topic where LLMs can be helpful. That's probably the very last spot where you want to use an LLM, especially not in Germany. One single mistake can cost you a fortune, and you won't be able to spot the mistake because you're not an expert. LLMs could be used to prime you for conversations with an expert (but be prepared to be corrected on points of law and fact) but they are no substitute. Corporate law i…

Who's the German equivalent of the American Certified Public Accountant?

Those shouldn't be prohibitively expensive; even small businesses in the US can typically afford one. Just go ask them.

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

#388

Post by tcfhgj »

ExpertAdvisor01 wrote: post #337
tcfhgj wrote: post #254

Earlier quoted context omitted.

yes, they do https://finanzamt-bw.fv-bwl.de/,Lde/Startseite/Service/Was+i...

This is only an exemption from VAT. This means you also loose the ability to claim back VAT. If you engage in b2b it is a net loss

there is more than just exemptions from VAT

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

#389

Post by triknomeister »

nolverostae wrote: post #201

I was someone who almost got hit by this tax. You don't need any offshore shenanigans to get around it. If you just want to move out of the country you can also just keep the ownership of the company within the country. You do this by putting your shares into a holding that stays in Germany even when you move out. That holding needs to be managed within Germany, so you need to assign a friend or be in Germany twice a…

Or simply open a business in Luxembourg. Done.

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

#390

Post by reaperducer »

lenerdenator wrote: post #387
jacquesm wrote: post #246

Earlier quoted context omitted.

> this is a topic where LLMs can be helpful. That's probably the very last spot where you want to use an LLM, especially not in Germany. One single mistake can cost you a fortune, and you won't be able to spot the mistake because you're not an expert. LLMs could be used to prime you for conversations with an expert (but be prepared to be corrected on points of law and fact) but they are no substitute. Corporate law i…

Who's the German equivalent of the American Certified Public Accountant? Those shouldn't be prohibitively expensive; even small businesses in the US can typically afford one. Just go ask them.

Those shouldn't be prohibitively expensive; even small businesses in the US can typically afford one.

Having an accountant is one of the hallmarks of a legitimate business.

If you're doing it on your own without a professional to watch out for you, and advise you, and take care of the details so you can do more important things, it isn't a company, it's a hobby.

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