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Exit Tax: Leave Germany before your business gets big

eidel.io

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

#81

Post by pfannkuchen »

nbadg wrote: post #38
bigstrat2003 wrote: post #35

Earlier quoted context omitted.

Presumably you paid for that infrastructure in the form of taxes while you did business in the country. Why, then, should the state have additional claims on the money you made? Were the taxes they collected already not enough?

That's not what the exit tax is, though. The German exit tax is effectively just a way to give the existing capital gains tax a way to tax unrealized gains when you leave the country, to prevent you from dodging taxes on capital gains by simply leaving the country. In other words, it's not an additional claim. It's simply an enforcement mechanism for the money you already hypothetically owe.

Don’t you have to pay capital gains on sale to USA government even if you leave? I thought it was based on where the shares were assigned.

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

#82

Post by throwawayoldie »

_zoltan_ wrote: post #75
woodson wrote: post #49

Earlier quoted context omitted.

Because he was German Bohemian? ( https://en.wikipedia.org/wiki/Sudeten_Germans#Austria-Hungar... )

no, because bureaucrazy in Germany is rampart.

He didn't live in Germany.

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

#83

Post by em-bee »

olieidel wrote: post #25
lifestyleguru wrote: post #4

also buy fax machine, dozen ring binders, and paper shredder before you start that business

Also: - A printer (the most important equipment of any German startup founder) - Envelopes for letters - A stamp with your company name (some companies and agencies you deal with require you to stamp things, because a stamp obviously proves, beyond any doubt, that you are acting on behalf of your company, because obviously no one would be able to create a similar stamp with your company's name on it, right) - A virtu…

for comparison in china stamps completely replace the signature. but then, digital signatures that are not cryptograpically signed are no better.

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

#84

Post by FooBarWidget »

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…

> German company now has 0 in revenue, wind it down and leave.

You forgot about employees. If German employment law is anything like the Dutch one, then it means you can't wind down the company while you have employees. They may refuse to leave. Firing them may be subject to government approval, who may also refuse.

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

#86

Post by tastyfreeze »

FooBarWidget wrote: post #84
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…

> German company now has 0 in revenue, wind it down and leave. You forgot about employees. If German employment law is anything like the Dutch one, then it means you can't wind down the company while you have employees. They may refuse to leave. Firing them may be subject to government approval, who may also refuse.

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

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

#87

Post by opo »

FredPret wrote: post #60
EndsOfnversion wrote: post #36

Earlier quoted context omitted.

Lets drop you into the mid Cretaceous period and see how far your education takes you. Without the contributions of millions of others on a daily basis you’d have nothing.

In business, you pay for those contributions. Milton Friedman describes how a pencil is made with the self-coordinated efforts of millions of people around the globe: https://www.youtube.com/watch?v=67tHtpac5ws

For those unaware, the original essay "I, Pencil" was written by Leonard Read:

https://fee.org/ebooks/i-pencil/

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

#88

Post by em-bee »

FooBarWidget wrote: post #84
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…

> German company now has 0 in revenue, wind it down and leave. You forgot about employees. If German employment law is anything like the Dutch one, then it means you can't wind down the company while you have employees. They may refuse to leave. Firing them may be subject to government approval, who may also refuse.

a quick check says it isn't. you only have to consider the notice period which depends on how long people have been working there. which means you can't wind down in a hurry but there is no right to refuse to leave nor any refusal from government.

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

#89

Post by cm2187 »

elephant81 wrote: post #63

I dont see how you couldn't structure this with an offshore licensing deal. Ie Irish company picks up 99% of billing, German company sends Irish company license fees etc and reduce profit of German company to zero for three years.

IANAL, but it seems it also applies to foreign companies. Who owns the irish company? Also tax authorities tend to look very carefully at these transfer pricing arrangements as you are also potentially dodging the corporate tax rate.

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

#90

Post by cojo »

Oli (Oliver? Not sure which you prefer, which I realize now I should have asked a long time ago in our first call) -

Just wanted to reiterate that I really appreciate what you have done with both OpenRegulatory and Formwork, as it was a big unlock for one of the companies I helped a few years ago as we navigated our way into the QMS / FDA / med. reg. world.

While reading this as a many-times-over-founder myself, I deeply felt multiple emotions which this would bring upon me if I were in your shoes after all the work I know you’ve put in.

I hope you are able to navigate this to a happy / successful outcome for yourself and any others involved for the relevant compan(y/ies)!

I am grateful for what you have contributed over the years on the software and documentation fronts with OpenRegulatory and Formwork both.

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