Accumulation benefit
The retention benefit is a tax regulation that was introduced in Germany from January 1, 2008 as part of the corporate tax reform . The legal basis is Section 34a of the Income Tax Act (EStG). The retention benefit is intended to bring the tax burden of partnerships and sole proprietorships into line with the lower tax burden of corporations . At the same time, there should be an incentive for a better equity base . In Germany there were already comparable regulations in 1931 and 1950, but these were withdrawn in both cases due to a lack of practicality.
functionality
Profits from partnerships ( co-entrepreneurs and sole proprietorships ) that are not withdrawn - i.e. those left in the company - are taxed in full or in part at a rate of 28.25% (plus solidarity surcharge and, if applicable, church tax ) instead of the collectively agreed income tax. If the retained profit less the tax due on it is withdrawn in later assessment years, additional taxation of 25% plus surcharge tax takes place. It is therefore only worth taking advantage of the retention allowance if the average tax rate is over 28.25% and the "non-distribution" is as long as possible.
In the case of co-entrepreneurial shares, a retention benefit is only possible if the participation in the profit is at least 10% or more than € 10,000. The retention benefit also includes the special business assets i. S. d. Section 15 (1) No. 2 EStG.
Calculation of profit not withdrawn
Nach § 4 Abs. 1 oder § 5 EStG ermittelter Gewinn des Wirtschaftsjahres - maximum (0, Entnahmen im Wirtschaftsjahr minus Einlagen im Wirtschaftsjahr) ------------------------------------------------------------------------ = Nicht entnommener Gewinn = max. thesaurierbarer Betrag (§ 34a Abs. 2 EStG)
Off-balance sheet corrections
Off-balance sheet corrections are only made after the profit has been determined, so they can not influence the profit that has not been withdrawn .
- Tax-free profit shares
If the profit contains tax-free profit shares (e.g. foreign profit shares according to DTA), these cannot be the subject of the retention benefit because they are tax-free anyway. Withdrawal of these profit shares reduces the profit not withdrawn by the value that would not be reinvested anyway. Tax-free profit shares can therefore be withdrawn without having a negative impact on the amount that can be retained.
- Non-deductible business expenses
If the profit has arisen due to off-balance-sheet additions, the tax reduction cannot be claimed, since these amounts were also disbursed and therefore cannot be withdrawn. This applies e.g. B. for non-deductible business expenses and for trade tax.
Revocation of the application
The taxpayer can withdraw the application for the retention benefit until the income tax assessment for the following year is incontestable (Section 34a (1) sentence 5 EStG). This regulation is considered necessary in order not to expose the taxpayer to an incalculable risk when choosing the retention benefit - especially if there are unforeseeable losses in the following year.
Post-taxation
If the retention benefit is used, the tax office determines the - potentially - post-taxable amount according to § 34a (3) EStG:
im Veranlagungsjahr auf Antrag begünstigter Gewinn - Steuerbelastung in Höhe von 28,25 % zzgl. Solidaritätszuschlag + Nachversteuerungspflichtiger Betrag des Vorjahres - Bereits festgesetzte Nachsteuer + Nachversteuerungspflichtiger Betrag aus Wirtschaftgut-Übertragungen auf diesen Betrieb - Nachversteuerungspflichtiger Betrag aus Wirtschaftgut-Übertragungen auf anderen Betrieb - Beträge, die für die Erbschaftsteuer(Schenkungsteuer)anlässlich der Übertragung des Betriebs oder Mitunternehmeranteils entnommen wurden ------------------------------------------------------------------------ = Nachversteuerungspflichtiger Betrag
If the beneficiary profits are withdrawn in a later financial year , additional taxation at a tax rate of 25% plus solidarity surcharge and, if applicable, church tax must be carried out. Subsequent taxation must always be carried out if the balance of withdrawals and deposits exceeds the profits for the current year. In addition, additional taxation must be carried out if the company
- sold or abandoned
- is incorporated into a corporation or a cooperative or converted
- the profit is no longer determined in accordance with Section 4 Paragraph 1 Clause 1 or Section 5
or if the taxpayer applies for subsequent taxation.
Subsequent taxation is carried out at the latest when the taxpayer dies. The tax rate for the originally beneficial amount is then a total of 48.32% income tax including the solidarity surcharge. A number of exceptions have been made to mitigate negative consequences. The withdrawal for the payment of inheritance / gift tax does not lead to subsequent taxation. Even when transferring or transferring individual assets to another business asset of the taxpayer, subsequent taxation can be avoided by simultaneously transferring the amount subject to subsequent taxation. Subsequent taxation is also not provided for free transfers of businesses or co-entrepreneurs (Section 6 (3) EStG), as the amount subject to subsequent taxation is transferred to the legal successor (Section 34a (7) EStG).
BMF letter on ambiguities
The retention benefit is a complicated tax regulation that contains a number of disputed ambiguities among experts, some of which were only clarified by a letter from the Federal Ministry of Finance.
- According to margin number 23 of the BMF letter cited, if the retention benefit is used, the non-reinvestable income is taxed at the tax rate that results from the taxable income without the benefit amount.
- The trade tax should be treated as a "non-deductible business expense" and not as a "withdrawal". The main effect of this provision, however, is that the payment of trade tax cannot be offset by a deposit of the same amount.
Trade tax and tax-free profit shares
The balancing of trade tax and tax-free profit shares is unclear. The trade tax as a non-deductible business expense increases the taxable income compared to the balance sheet profit. Tax-free profit shares, however, reduce the taxable income. In the literature, the opinion is occasionally taken that both values are netted and thus, if the amount is the same, this can lead to the full balance sheet profit being retained; however, this is not undisputed.
- Example: The taxable profit (without deduction of trade tax and without taking tax-free income into account) is € 70,000, there is tax-free income of € 20,000 and trade tax of € 20,000 has to be paid. It is unclear whether in this case € 70,000 or € 50,000 can be reinvested.
application
The retention benefit is to be applied for the first time for the 2008 assessment period (see Section 52 (48) EStG).
A retention benefit is given for profits that have not been withdrawn
- Agriculture and forestry ( Section 13 ),
- Commercial enterprise ( § 15 ) or
- independent work ( § 18 ), cf. Section 34a (1) sentence 1 EStG.
A retention benefit is not possible for capital gains for which the taxpayer avails himself of the tax exemption under Section 16 (4) EStG or the tariff reduction under Section 34 (3) EStG.
criticism
In practice, it is assumed that the tax burden arising after the retention benefit is to be settled from funds taken from regular taxation or other sources of income; in contrast to the payment of the income tax liability that is no longer applicable from funds that have also been favored under Section 34a of the Income Tax Act. The latter is to be interpreted from the wording of Section 34a (3) sentence 2 sub-sentence 1 EStG. Because z. If, for example, the income tax liability has been paid by private funds, an amount not subject to subsequent taxation would arise in accordance with the sub-rate mentioned in the amount of the theoretical tax burden according to Section 34a (1) EStG. In other words, the amount to be post-taxed does NOT match the remaining accumulation amount, contrary to general practice in corporations.
The sensible application of the retention benefit would therefore be the assertion of the benefit on the profit including the income tax owed according to § 34a EStG and the settlement of the resulting income tax liability through a non-deductible expense according to § 12 No. 3 EStG. However, according to the BMF letter cited, this practice should not be possible. This is one of the reasons why the treatment of off-balance sheet corrections is not without controversy in the literature.
Also:
- Old reserves that are withdrawn after the retention benefit is used for the first time lead immediately to subsequent taxation. Profits that were made before the introduction of the regulation on January 1, 2008 and left in the company can no longer be withdrawn without additional tax. This could have resulted in all of the old capital being withdrawn by December 31, 2007 or being replaced by borrowed capital. As a result, the goal of strengthening equity was initially not achieved.
- Another point of criticism is that only partnerships that determine the profit by comparing business assets can benefit from the regulation.
- The regulation is considered to be extremely complicated and therefore in no way simplifies taxation.
See also
literature
- Gragt / Wißborn, NWB compartment 3, page 14621
- Ley / Brandenberg, FR 2007, page 1085
- Schultes-Schnitzlein / Keese, NWB compartment 3, page 14683
- Thiel / Sterner, DB 2007, page 1099
- Messerer, Corporate Tax Reform 2008 , Richard Boorberg Verlag , 2007, ISBN 978-3-415-03956-8
- BMF letter of August 11, 2008, Az. IV C 6 - S 2290-a / 07/10001
- Neubert, Bob / Plenk, Tobias, 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
- ↑ a b Special edition on §34a EStG, Richard Boorberg Verlag (PDF; 781 kB) ( Memento of the original from April 30, 2014 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ^ Bühler, Ottmar (1953): Tax law of companies and groups. 2nd edition Berlin, Frankfurt a. M., page 7
- ↑ Draft law with commentary (PDF file; 1.8 MB)
- ↑ BMF letter dated August 11, 2008 ( page no longer available , search in web archives ) Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice.
- ↑ Note No. 24
