Legal form neutrality

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Decision neutrality
Investment neutrality Funding neutrality Legal form neutrality

Legal form neutrality exists when the tax burden on the profit of sole proprietorships , partnerships and corporations is equally high.

Basics

A lower taxation of retained profits could be justified, since the expansion of small companies is hindered by more difficult raising of capital on the capital market , compared to large companies, which are subject to more systematic monitoring ( stock exchange , credit ratings ) and can therefore raise capital more easily. On the other hand, the management problems of large companies are often considerably more complex than those of small companies. Although the organizational forms and the associated risks of the self-employed and the large companies are in part similar, loss of welfare would still result from tax distortions if the choice between them did not exist, since the organizational forms are not completely interchangeable.

Jurisprudence

According to the case law of the Federal Constitutional Court , Article 3 (1) of the Basic Law does not contain a general constitutional requirement of taxation that is neutral in terms of legal form. This was decided in relation to the preferential treatment of commercial income that existed up to and including 2013 in accordance with the then Section 32c EStG . It depends on whether there is a sufficient objective reason to treat entrepreneurial activities differently for tax purposes.

See also

literature

  • Christian Weinelt: Legal form neutrality of corporate taxation, constitutional requirement or legal policy requirement? A constitutional and corporate law appraisal of the applicable dualistic corporate tax law , Hamburg 2006, 350 pages ISBN 978-3-8300-2268-8
  • Friedrich Klein-Blenkers: Legal Forms of Companies , CF Müller Heidelberg 2009 (October 23, 2009), 251 pages ISBN 978-3-8114-3263-5
  • Bob Neubert, Tobias Plenk: Influence of the corporate tax reform 2008 on the choice of the legal form of companies. In: Taxes and Studies 2008. pp. 37–44

Individual evidence

  1. ↑ BVerfGE 116, 164 , 197
  2. ↑ BVerfG, decision of March 24, 2010, Az. 1 BvR 2130/09, Rn. 10, full text .