Liquidation of business
October 8, 2010 | 25,00 EUR | answered by StB Kiehne Katja Kiehne
Dear Sir or Madam,
I operate a business on Ebay that I would like to dissolve now.
What tax implications do I need to consider... and what happens to the inventory (value), can I write it off completely or partially? Or is there another solution without causing problems with the tax office?
Thank you for your efforts.
Dear inquirer,
I am happy to answer your question within the scope of an initial consultation and in consideration of your fee as follows. Please note that deviations in the facts may lead to different tax consequences.
Your business closure is treated tax-wise as a business sale.
The closure profit is calculated as follows:
Fair value of assets transferred to private assets
- Sales costs
- Value of business assets
= Closure profit
If you have previously calculated your profit using the so-called income-surplus calculation (EÜR), a switch to balance sheet accounting must first take place. Therefore, if you have claimed the purchase of goods as business expenses within the EÜR, the remaining goods must be recognized in the balance sheet at their fair value (possible selling price, maximum acquisition cost). The fair values must then be applied when transferring the goods to private assets.
Highly simplified example:
You still have paid goods worth 10,000 EUR. Possible selling price a.) 12,000 b.) 8,000
Solution a.)
Balance sheet entry: 10,000 to be taxed
Closure profit 0
Solution b.)
Balance sheet entry: 8,000 to be taxed
Closure profit 0
Taxation would only be waived if you can prove (not just claim) that the goods have no value anymore.
Best regards,
Katja Kiehne
Tax consultant Dipl.-Finanzwirtin (FH)
