Actually, the tax authorities are once again concerned with plugging real or supposed tax loopholes. These may have been utilised by some companies through disposal transactions at a loss. An amendment to the law passed by the Bundestag on 1 December 2016 is directed against this. Nevertheless, the well-hidden amendment to the law, which the Bundesrat is expected to approve on 16 December 2016, can be very beneficial for a holding company in the legal form of a corporation.
It is not only in times of low and negative interest rates that companies park liquidity in listed shares or equity funds. With regard to the dividends from these, this is no longer worthwhile from a tax perspective, since from March 2013 so-called free float dividends from shareholdings of less than 10 % (15 % for trade tax purposes) are fully tax-exempt and no longer only 95 %. The effective burden had thus increased from around 1.5 % to the normal level of around 30 %. The fact that the dividend yield deteriorated in this way was, however, tolerated in practice.
However, even with a capital gain, companies have so far been subject to full taxation faster than most people realised. The holding GmbH, which is also frequently used by SMEs, became a so-called finance company more quickly than expected as soon as its main activity consisted in particular of acquiring and holding investments and financing them. Even a single shareholding could be sufficient. As a result, capital gains were fully taxed regardless of the size of the investment. In return, losses were also allowed to be deducted, but people were happy to sit these out if the liquidity was not needed - after all, the investment should be worthwhile. Taxation was based on the assumption that the shares were acquired with the aim of achieving a short-term trading profit. This undefined legal concept was the gateway to tax audits in order to improve the additional result with full taxation.
From 2017, the term "financial undertakings" will only include those in which credit institutions or financial services companies hold a direct or indirect interest of more than 50 %. The legislator has now given the provision the clear bank-specific focus that was originally lacking. The unfortunate wording of "short-term realisation of a proprietary trading profit" has been deleted.
As a result, the sale of shares and equity funds by corporations outside the banking sector will generally be tax-exempt from 2017. This means that gains are effectively taxed at only around 1.5 %. Conversely, however, losses will only have a minimal impact. Particularly in the low-interest phase, parking liquidity in listed securities is thus gaining a new tax-favourable relevance, without a corporation outside the banking sector having to fear having to pay full tax on its share gains. But there are also completely new opportunities for so-called day traders if they conduct their business in a UG (haftungsbeschränkt) or a GmbH.
Dr Wolfgang Walter is a lawyer, tax consultant and specialist lawyer for tax law at TAXGATE, a tax law firm specialising in transactions, investments and tax compliance, and comments on the tax group regulations in the KStG commentary published by Stollfuß-Verlag.
