What tax aspects do I need to consider when taking over a company?
May 26, 2022 | 50,00 EUR | answered by Konrad Falk
Dear Mr. Lawyer,
I am facing the challenge of transferring my company to my son and have some questions regarding the tax aspects of business succession. Currently, I am the sole owner and my son is intended to continue running the business in the future.
I am currently unsure about how the tax burden looks like in a business succession and which types of taxes are involved. I am also concerned whether my son will be able to bear the tax burden and if there are ways to minimize it.
Furthermore, there is the question of how the transfer can be best structured from a tax perspective to be advantageous for both me and my son. I am also unsure about the potential tax consequences if my son inherits the business instead of buying it.
Could you please provide me with more information on the tax aspects of business succession and suggest possible solutions to achieve an optimal tax structure? I would be very grateful for your assistance in this matter.
Best regards,
Ben Schillinger
Dear Mr. Schillinger,
Thank you for your inquiry regarding the tax aspects of a business succession. Business succession is a complex topic that requires many tax considerations. In your case, where you want to pass on your company to your son, there are various types of taxes that could come into play.
First and foremost, inheritance tax should be considered. If your son inherits the company, inheritance tax will apply. The amount of tax depends on the value of the company and the relationship between the parties. However, there are exemptions and tax benefits for business assets that may apply in certain cases.
Furthermore, income tax should be taken into account. If your son takes over the company, he will have to pay income tax on the profits generated by the business. There are ways to minimize the tax burden, such as through careful contract design or the use of tax benefits.
Another important tax type is value-added tax. If your son takes over the company, he must correctly pay the VAT and file VAT returns. It is important to be familiar with the tax obligations to avoid potential errors.
To achieve an optimal tax structure for the business succession, I recommend consulting with a tax advisor or specialized lawyer early on. Together, you can find an individual solution that is beneficial for both you and your son. There are various options for structuring, such as utilizing tax exemptions or setting up tax-optimized contracts.
Overall, it is important to address the tax aspects of a business succession early on to avoid unpleasant surprises. I am happy to assist you further and support you in the tax planning of the company transfer.
Sincerely,
Konrad Falk, Attorney
