Why taxation in the start-up phase?
Taxation in the founding phase sounds paradoxical. For in the founding phase, the foundation does not yet exist, so no income can be achieved. German tax law, however, is designed to tax the income earned in full (except for some exceptions).
What is this related to? In the so-called endowment business, the founder undertakes to transfer assets and taxation begins at this point. In the following two articles, a distinction is made on the one hand between non-profit and private-law organized (family) foundations and, on the other hand, the taxation of the founder in the founding act is examined.
Transfer to a non-profit foundation
On the part of the founder, care must be taken as to whether the assets are transferred from the private assets or from a working capital. If a transfer is made to the Foundation free of charge, this is free of income tax. No capital gain is achieved. The foundation assumes the asset (for example a property) with the amortized cost.
If the transfer is carried out out of an operating capacity, for example, a partial operation or whole operation is transferred, a distinction is made as to whether or not transmission takes place under detection of the hidden reserves.
Under hidden reserves, the difference between amortized cost (original purchase price minus deduction for wear short Afa) and the actual value at the time of the transfer is understood.
The thing about the book value
Ten years ago you bought a multi-family house for 1 Mio. €. Depreciation and amortization amounted to 200.000 €, so the carrying amount is still 800.000 €. Shortly before the transfer, you received a purchase offer of 1,5 million € for this property. The property thus contains 700.000 € hidden reserves (actual value 1,5 € million. /. 800.000 € book value).
It is possible to transfer this property directly from the operating assets to book values (§ 6 Abs. 3 EstG, as a partial business) -? 800.000 €, or under uncovering the hidden reserves with an actual value of € 1,5 million.
Profit from the silent reserve
If the transfer is made at book value, no profit is recorded from the donor's side. Transfer value (withdrawal) 800.000 €. /. Carrying amount 800.000 € = 0 € capital gain.
If the transfer occurs while uncovering the hidden reserves, a withdrawal profit is obtained in the operation of 700.000 € (see above). As a result, the donor has to tax 700.000 with a tax-free rate, without a corresponding flow of liquidity opposing him.
You have the choice!
Therefore, the transfer of whole enterprises or part-enterprises to a non-profit foundation should always take place without uncovering the hidden reserves.
However, this option does not exist for the transfer of individual assets (for example, a company truck is transferred to the Foundation). This transfer must be made by uncovering the hidden reserves (withdrawal profit) and the withdrawal profit is subject to sales tax (§3 Abs..1b UStG)!
The gift tax
The foundation is an asset growth. This increase in wealth does not trigger taxation of income (private property is not tax-deductible), but taxation according to the law of inheritance / gift tax.
Taxation takes place after the deduction of small exemptions in accordance with tax class III, since the foundation does not identify any family ties with the founder. In the case of a transfer of assets of 600.000 €, 30% x 600.000 € = 180.000 € may therefore be charged for the foundation gift tax!
The land purchase tax
If it is to transfer property is also an eye on the land purchase tax.
Land transfer tax is the tax in Germany which transfers transactions of real estate subject to taxation. There is no uniform tax rate here. This differs from state to state and is approx. 4% of the transferred value.
Exemption from basic tax
If the land transfers are subject to the gift tax, they are, however, exempt from the basic income tax pursuant to § 3 No. 2 GrEStG.
However, this applies only to purely free transfer of assets. If the real estate loan is also transferred with a real estate loan, the real estate liability is deducted from the transferred liability.
Examples of taxation
You transfer a property (value 1 million €) and the associated loans, which means that in the future, the Foundation must also use the income from the loans (eg 500.000 €). On 500.000 € property transfer tax (4% 0 20.000 €) is charged.
This is due to the fact that within the scope of the gift tax consideration, only 500.000 € is also subject to taxation (1 million value./. 500.0000 € liabilities = 500.000 € asset growth).
The taxation of the non-profit foundation in the founding act, on the other hand, is marked by many simplifications.
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