A new regulation makes it easier to transfer business assets between partnerships with identical partners.
What is changing
The aim is to implement the requirements set by the Bundesverfassungsgericht (BVerfG).
The new rule allows business assets to be transferred between partnerships involving the same partners at book value.
But when does so-called identity of ownership exist? According to the legislative reasoning, there is no identity of ownership if a natural person or legal entity is involved in only one of the two partnerships.
A shareholding held as trustee is also considered detrimental, even if the trustee themselves is not a co-entrepreneur. Zero-percent interests, however, are an exception, for example those held by a general partner GmbH.
It is also provided that, when a business asset is transferred from one corporation to another corporation or similar institution, the original share can simply be replaced.
Info: Terminology
– Book value: The value of an asset as recorded in the accounts.
– Identity of ownership: Exactly the same persons hold interests in two partnerships.
– Trustee: A person or institution that legally manages ownership of something but is not the economic owner.
Entry into force
This applies in all open cases.
Since it cannot be ruled out that the book value approach may work to the disadvantage of co-entrepreneurs in individual cases, for reasons of protection of legitimate expectations, the application of § 6 Abs. 5 Satz 3 Nr. 4 EStG may be waived for transfers prior to 12 January 2024, provided that the co-entrepreneurs involved in both co-entrepreneurships jointly apply for this.
Frequently asked questions
Frequently asked questions
When is a book-value transfer between sister partnerships possible?
A transfer of assets between partnerships at book value is possible if the same persons hold interests in both entities (identity of ownership). The new rule implements a directive from the Bundesverfassungsgericht (Federal Constitutional Court) and avoids the disclosure of hidden reserves in such transfers.
What does identity of ownership mean in partnerships?
Identity of ownership exists when exactly the same individuals or legal entities hold interests in both partnerships. If a person is a partner in only one of the two entities, identity of ownership is lacking and a book value transfer is not possible.
How does a trustee shareholding affect identity of ownership?
A shareholding held as a trustee is generally harmful to the identity of ownership, even if the trustee is not a co-entrepreneur. An exception applies to zero-percent shareholdings, for example a general partner GmbH without a capital share.
From when does the new rule on book value transfers under § 6 Abs. 5 Satz 3 Nr. 4 EStG apply?
The rule applies to all open cases. For transfers made before 12 January 2024, however, all participating co-entrepreneurs may jointly apply to opt out on grounds of legitimate expectations, if the book value approach would be disadvantageous in the individual case.
How can adverse consequences of the mandatory book value approach be avoided for prior transfers?
If the mandatory book value approach has an adverse effect on the co-entrepreneurs, the co-entrepreneurs holding interests in both co-entrepreneurships may jointly apply for § 6 Abs. 5 Satz 3 Nr. 4 EStG not to be applied to transfers made before 12 January 2024.