Anticipated advertising costs for the purchase of a GmbH
December 23, 2009 | 50,00 EUR | answered by Matthias Wander
In the context of my 2007 income tax return, I claimed "previously incurred, futile advertising costs" in connection with a planned purchase of 75.1% of a GmbH (share deal) amounting to TEUR 18. These costs mainly consist of due diligence costs (TEUR 15) of a public accounting firm and travel/accommodation/meal expenses (TEUR 3). The purchase of the company then failed shortly before completion. The tax office accepted the fact that costs were incurred in advance, even if no income was generated, but did not recognize the costs because they relate to the asset sphere. However, I believe that they are either acquisition costs related to the income type capital assets or, since I would have been employed as a managing director, related to dependent employment. The tax office rejected an appeal, so I would now have to file a lawsuit. What do you think the chances of success are?
Dear inquirer,
Thank you for your inquiry, which I would like to answer based on the information you provided in the context of an initial consultation.
According to the constant jurisdiction of the Federal Fiscal Court (BFH), advertising costs are all expenses that are caused by the generation of taxable income. The costs you described are not advertising costs, but acquisition costs of the investment. The acquisition costs could only be taken into account when the investment is sold (§ 17 EStG). However, since you have not acquired any investment, the costs you have incurred cannot be considered for tax purposes at all.
A lawsuit would have little success, as the BFH has decided this multiple times, most recently in the judgment of 27.03.2007 (VIII R 62/05).
I regret to inform you that I cannot provide a more favorable answer.
Kind regards,
Wander
Tax consultant
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