Hybrid society

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In tax law, a hybrid company is a company whose legal form is taxed differently from country to country. As a society, in a country like a corporation as one and in another country partnership are taxed. This enables a corresponding tax structure to be implemented without being dependent on the legal form or the tax treatment.

Common legal forms

The German GmbH & Co. KG (§§ 19 Abs. 2, 264a HGB) is particularly well suited as a hybrid company structure, as it has characteristics of people and companies. At the GmbH & Co. KG there are no natural persons, but only corporations such as B. a GmbH is involved as a fully liable partner. In the case of the GmbH & Co. KG, the GmbH is the fully liable general partner . In addition, the shareholders of the GmbH are also limited partners of the GmbH & Co. KG in order to secure the entrepreneurial influence. The GmbH has no influence on the company, it only assumes the liability risk. In the case of outbound investments in the USA, the GmbH & Co. KG is treated as a corporation under US law and obliged to invest in US real estate. Through these investments, the GmbH & Co. KG is exempted from German tax for income generated in the USA. In addition, a possible inheritance tax liability in the USA on the death of natural persons (limited partners) is avoided.

Also, Limited Liability Companies (LLC) are often used when investing in the United States . An LLC is a hybrid US corporate form that looks like a corporation from the outside, but is treated like a partnership for tax purposes. With regard to domestic taxation of the LLC, the Federal Fiscal Court states that the taxation right for income that the domestic shareholder from participation in an LLC can only be taxed domestically if the LLC is a partnership from a German perspective. If the LLC is viewed as a corporation, there is no domestic taxation.

The Limited Liability Partnership (LLP) is another hybrid company form under US law that combines the characteristics of a partnership with the advantages of a corporation.

For inbound investments in Germany, US investors often use the GmbH as a hybrid form of company, as the so-called check-the-box regulations allow an option to qualify the GmbH in Germany as transparent or as a shielding corporation.

Combating hybrid design strategies

The scope for tax structuring with the help of hybrid companies was restricted from 2007 onwards. This is achieved through a so-called fallback clause (Section 50d ( 8) EStG) and a so-called subject-to-tax clause (Section 50d (9) EStG). These regulations are intended to prevent “white” income , ie double non-taxation is to be avoided. According to Section 50d Paragraph 9 No. 1 or No. 2, an exemption is not granted in Germany if the other state applies provisions of the treaty law in such a way that income is not taxed in that state or if the person is not fully taxable in the other state due to lack of residence is.

Legal regulations are also intended to prevent “white” income. Here is z. B. Art. 23 para. 4 letter b DBA-USA. This standard is largely congruent with Section 50d (9) No. 1 EStG, so that there is no treaty override .

Individual evidence

  1. ^ Jacobs, O., International Corporate Taxation (2011), pp. 1319–1320.
  2. ^ Jacobs, O., International Corporate Taxation (2011), p. 1320.
  3. ↑ Wöhe, G./Döring, U., Introduction to Business Administration (2011), S. 245th
  4. ^ Jacobs, O., International Corporate Taxation (2011), p. 1320.
  5. ↑ Henke, U./Lang, M., IStR 2001, 514 ff.
  6. ↑ [1] BFH v. August 20, 2008, Federal Tax Gazette II 2009, 263.
  7. ^ Jacobs, O., International Corporate Taxation (2011), p. 1321.
  8. ^ Jacobs, O., International Corporate Taxation (2011), p. 1321.
  9. ^ Jacobs, O., International Corporate Taxation (2011), p. 1320.
  10. ↑ Brähler, G., Internationales Steuerrecht (2012), pp. 353–354.
  11. ↑ Wolff in Wassermeyer, DBA-USA, Art. 23, Rn. 308