Embossing theory
In German income tax law , the term embossing theory describes the qualification of a type of income . This is observed by the case law and administrative practice.
Legal basis
According to Section 15 (3) No. 2 EStG , an activity carried out by a partnership is deemed to be commercial ( legal fiction ) if
- all personally liable partners ( general partners ) are corporations and
- only these (or non-shareholders) are authorized to manage the company .
According to this regulation, this constellation characterizes all income for commercial income (commercial partnership). The "typical" design - characterized by the legal form as a commercial enterprise - is the GmbH & Co. KG , but the GmbH & Co. KGaA and the AG & Co. KGaA can also be considered for a commercial character, provided they are not originally commercially active are.
One disadvantage is that the company is subject to trade tax on all profits . Partners who are natural persons can have the trade tax offset against their income tax. However, this - depending on the municipal trade tax multiplier - only up to a certain maximum amount. Further disadvantages can be the bookkeeping and accounting obligations and the additional requirements for traders.
Key benefits are however, in the allocation of losses companies , increased depreciation , the options for provisioning and not least - in a case of succession - in lower tax rates and increased tax allowances for inheritance tax .
See also
Individual evidence
- ↑ BFH, judgment of July 10, 1986, Az. IV R 12/81, BStBl. 1986 II p. 811; Full text.
