Posted by olieidel 1 day ago
This is absolutely crazy. For comparison, below are the costs in Switzerland (and you can do all the things yourself by writing a letter signed by the authorized persons, so add whatever your time costs):
" I own a few companies which means I'd be hit by the German exit tax. "
We don't know how many companies does he own.
We can look into exit tax rate, in different countries:
Germany: effective tax rate of up to roughly 28.5%
Japan: CGT rate is 20.315%
Israel: Standard CGT rate is 25%
Austria: Standard CGT rate is 27.5%
Germany values your companies at 13.75 * earnings by default.
If you prefer to provide an alternate valuation, you're looking at valuation costs of at minimum 10k€ per company (Wirtschaftsprüfer).
I don't have a perfect answer to that, but we can at least observe that most people nowadays affected by the German exit tax are not rich department store owners who planned to move to Switzerland to optimize their company sale taxation.
Most people I talk to are other founders who own a small business, and the overall bureaucratic complexity and tax advisor costs are cost-prohibitive for leaving the country.
Change or add company address
"Änderung des Rechtsdomizils oder einer zusätzlichen Adresse"
30 CHF
Change CEO
"Eintragung, Änderung oder Löschung von Personenangaben oder der Funktion einer Person"
20 CHF
Changing company suffix
"Umwandlung in eine juristische Person"
420 CHF
Deletion (from the registry) due to leaving the country
"Löschung infolge Wegzugs ins Ausland"
210 CHF
I look forward to your blog post.
I had to do the same when moving country and it’s right.
This ranks right up there with the author who wrote a children's book about a village where they had to turn over 102% of the potatoes they grew. https://en.wikipedia.org/wiki/Pomperipossa_in_Monismania
I’m confused by that article. So, it seems there is a clear option that doesn’t require you to pay a large exit tax or to sell your shares. I don’t understand all the complaining.
Germany’s tax system has a lot of issues and deserves to be criticized, but for that specific situation it seems there is a clear option that is pretty reasonable?
If this solution would be fast, cheap and simple, then I'd generally be fine with that. However, it is not.
US Exit Tax for comparison:
https://www.irs.gov/individuals/international-taxpayers/expa...
https://americansoverseas.org/en/knowledge-centre/exit-tax-u...
This is an outrageous valuation and taxation scheme.
I think German politicians either don't understand the magnitude of the issue, or they have been coopted by lobbying somehow. It's such a tough environment for innovation.
It's not that you can't have an exit tax, it's that it shouldn't be so out of tune with other OECD countries, so bureaucratic and so expensive to even process.
That whole article is really whiny, there is no massive penalization
Many founders I've talked to opted to leave Germany before founding their companies; and many would-be founders opted to not found their company while remaining in Germany (for now).
Germany tax system has a lot of problems, especially for founders, that specific one doesn’t sound like one honestly