Taxation of the sale of a website / blog
December 29, 2011 | 40,00 EUR | answered by Oliver Burchardt
It may be that I will be selling a website that I operate in the near future. The buyer will likely be an individual or a company in the USA.
Since it is a relatively high sales amount (seven figures), I would prefer not to pay taxes on it at my regular income tax rate.
Question: What options are available to reduce the tax costs, and how complicated would they be to set up? Would I still have to pay taxes on the proceeds in this way?
I am a freelancer myself, and I earn income through this site among other things.
Dear inquirer,
Thank you for your inquiry, which I would like to answer as part of an initial consultation.
Basically, the sales proceeds are fully taxable.
However, there are various design options that can affect the amount of the sales proceeds, the timing of the inflow, and/or the tax rate.
For example, in the context of contract design, consideration could be given to a pension solution that secures the inflow of proceeds to you not in a lump sum, but over several years. Depending on your income situation, a reduction in the tax rate could be conceivable.
It is also possible to consider the sale as a business cessation within the meaning of § 16 of the Income Tax Act, resulting in a reduced tax rate being applied.
The question of which costs reduce the sales proceeds must also be considered.
In your case, advice in this forum can only provide a very rough overview of the situation and possible tax consequences or design alternatives. Given the amount at stake, detailed tax advice is absolutely essential. I therefore recommend that you seek advice from a colleague locally, taking into account all personal circumstances. I am also available for such advice, and I would of course credit the fee paid here. If you are interested in retaining my services, please contact me using the contact information provided in my profile.
Kind regards,
Oliver Burchardt
Certified Public Accountant
Tax Advisor
