A constant annoying topic: Taxes when selling a company. You certainly don’t feel like reading through entire legal bases in this area either. That is why we have summarized all the necessary information for you here in a nutshell. So you are optimally prepared for a company sale and do everything right from a legal point of view. This is information that is not a substitute for tax advice.
Sales profit relevant to tax law
Not all entrepreneurs always have one successor found within their own family or through acquaintances, many decide to sell their business. When it comes to taxes when selling a company, there are a few things to consider. The amount of the capital gain serves as the basis for all calculations. This results from the deduction of the costs incurred through the sale as well as the balance sheet business assets from the sales price.
The legal basis of taxes when selling a company provides for an attractive special regulation, especially for older entrepreneurs.
All sellers over the age of 55 benefit once in their life from an exemption of 45,000 euros on the sale price. However, as soon as the sales price exceeds the limit of 136,000 euros, the excess amount is subtracted from the tax exemption.
The selling price is 100,000 euros. After deducting the exemption, 55,000 euros remain to be taxed (100,000 € – 45,000 €).
The sales price is € 166,000. The border crossing of 136,000 euros is exceeded by 30,000 euros. The tax exemption is thus reduced to 15,000 euros (45,000 € – 30,000 €). This results in a taxable sales profit of 151,000 euros (166,000 € – 15,000 €).
Tax rate reduction
The legal system with regard to taxes on company sales provides for another special regulation for sellers over the age of 55 years.
The tax rate is calculated for them in accordance with the special provisions for extraordinary income. This means that all selling entrepreneurs of this age group according to § 34 Abs. 3 EStG benefit from a reduced tax rate. This is usually 56 percent of the average tax rate, but at least 14 percent. Sales profits over 5 million euros are excluded from this rule. As with the tax exemption, this option is only possible once for a lifetime.
For sellers of all other age groups, the one-fifth rule may apply.
The sales profit is divided over 5 years. This means that the income tax is only calculated on a fifth of the sales amount. The result is then multiplied by 5. The resulting amount is then added to income tax in the area of current income.
The rule of one fifth applies if this would result in a tax advantage for the seller. Fortunately, the tax office is ex officio according to § 34 para. 1 EStG to apply this measure self-cognizantly if necessary.
Tips for saving taxes when selling a company
To save taxes on the sale of a company, the sale of shares in a corporation offers the best basis for sellers. The tax base is comparatively low for corporations and therefore means the lowest tax losses for the entrepreneur.
It can therefore be advantageous for sellers to make their own company part of a corporation or to convert their business into one.
However, you should plan and implement this step in advance, as you cannot claim the tax benefits immediately after the change.
Company sale on Projektify
If you’re thinking about saving yourself all the tax work by selling your business, you’ve come to the right place. We at Projektify are experts in buying and selling web projects of all kinds. In addition to the possibility of using our platform free of charge, we are also happy to assist you as advisory experts. Take a look around our website for yourself or get here directly to the ad creation .
But even if you don’t want to sell at all, you’ve come to the right place. We always offer you new information on many economic topics. Among other things, we have focused on the areas Make money on the net , Passive income , Part-time self-employment or Corporate succession specialized.
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