Information on the allocation ratio for the distribution of tax bases
September 10, 2021 | 50,00 EUR | answered by Steuerberater Knut Christiansen
Dear tax consultant,
My partner and I have a small business (GbR) where the profit is split equally at 1/2 + 1/2. Now, my partner wants to reduce his workload due to age and has offered to only receive 1/3 of the profit, with me receiving 2/3 accordingly.
Question 1: Do I need to notify this change anywhere other than in attachment FB?
Question 2: If we were to close the business in a few years, it would need to be taxed as a capital gain based on market value. With my 2/3 share of the profit, I would have a relatively high tax burden. Is it possible to revert the profit distribution back to 1/2 + 1/2 in the year of the sale?
Thank you for your response.
Good day,
I am happy to provide you with the following feedback on your questions.
1.) In principle, you can agree to receive an advance payment/activity fee for your work. This compensation can be freely agreed upon in the contract. In this case, you would not have to transfer the shares in the GbR, but could compensate for the additional work done by you. Please enter this in the attachment FE 1 to the determination declaration. The advantage of this is that there is no gift in the form of a transfer of business shares. Your partner will then remain a co-owner at 50%.
For profit determination, you would proceed as follows, for example:
Profit without activity fee, e.g. 90,000 EUR.
Advance activity fee for you: monthly 2,500 EUR = 30,000 EUR p.a.
Profit to be distributed: 60,000 EUR. Each for A and B: 30,000 EUR
B would then have to pay taxes on the activity fee of 30,000 EUR in addition within the taxation framework, thus a total of 60,000 EUR.
2) If you proceed as described in 1., your partner would still have to tax 50% of the profit from the assignment, as he still owns 50% of the shares.
If shares were to be transferred back and forth, gift tax issues would arise each time. If you are not married, there is only a tax-free allowance of 20,000 EUR within 10 years. Therefore, it would be advisable to avoid this.
I hope this answers your questions. Feel free to contact me again if you have any further questions.
Please note that comprehensive advice cannot be provided within the scope of online consulting. This is initially only a first tax assessment.
Best regards,
Knut Christiansen
Tax consultant
