Substantial participation

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Significant participation was a concept of German tax law until 2001 .

According to Section 17, Paragraph 1, Sentence 1 of the Income Tax Act , income from commercial operations also includes the sale of shares in a corporation if the seller has held a direct or indirect stake in the company's capital within the last five years at a certain minimum rate. Until December 31, 1998, this minimum participation was 25%. Thereafter it was reduced to 10% and from the assessment period 2002 to 1% and the concept of substantial participation was abandoned by the legislature.

The basic system of the regulation has not changed with the reduction of the minimum participation to 1% and the abolition of the concept of substantial participation.