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Legal issues

Taxation

Taxation is an important issue when choosing a legal form. The main difference is between the partnership and the corporation. Below we will highlight these differences to give you a brief overview.

Taxation of Cooperations (GmbH & AG)

1. Companies

– The company makes a profit
– The profit is taxed at a corporate tax rate
– On the Company’s equity capital taxes are paid
– A separate tax return is filled in for the company

->  Distribution of dividend

2.  (Shareholders)

– The shareholders receive the dividends
– The shareholders have to declare their dividends as capital gains
– If a shareholder owns more than 10% of the company shares, only 50% of dividends must be declared

=> If the company does not distribute any dividends, the tax rate is initially lower than that of a partnership company
=> When distributing dividends the problem of double taxation arises

Taxation of Partnership Companies (Sole Proprietorship & Collective Partnership)

1. Companies

– The company makes a profit
– The profit must be taxed at a personal tax rate of the owner
– One has to pay the wealth tax on the companies assets
– No separate tax return filling is required for the company

-> The owner is eligible for all the profits

2. Owner

– The owner can access all the profits without further taxation

We will be happy to explain any details regarding taxation in a personal consultation.