how to set up a LLC in Germany

How to Set Up a Limited Liability Corporation in Germany

A limited liability corporation (LLC) in Germany can offer various advantages for businesses. To establish one, you need to consider the legal form that suits your needs, such as GmbH or UG. Choosing an appropriate company name and defining specific objectives are crucial steps. Engaging a notary, preparing company statutes, …

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gmbh meaning

GmbH: the Limited Liability Company Structure in Germany

The GmbH, meaning Germany, is a legal form of company that offers limited liability to its owners. Similar to LLCs in the United States and Ltd. in the United Kingdom, GmbHs provide a structure where owners are not personally responsible for the company’s debts. With a minimum capital requirement of …

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Company pension scheme in Germany (

Company pension scheme in Germany (bAV)

Basic information  Not everyone has the opportunity to make private provision for old age. For this reason, the German state has introduced an entitlement for employees to occupational pension provision.  Employees have a legal right to so-called deferred compensation and to pay into a company pension scheme. This entitlement exists …

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Employee participation in Germany

Employee participation in Germany

Especially for employees of start-up companies, there is a new regulation (§ 19a German Income Tax Act “EStG”) according to which income from the transfer of asset shares in the employer’s company is initially not taxed. This also applies if the asset participations are held indirectly via partnerships. The regulation applies …

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Fiscal unity Germany

Fiscal unity VAT in Germany: judgement of ECJ

A fiscal unity for VAT purposes pursuant to § 2 para. 2 no. 2 sentence 1 UStG (“German VAT act”) exists if a legal entity is financially, economically and organizationally integrated into the company of the controlling company according to the overall picture of the actual circumstances. The financial integration of …

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managing director´s salary

Amount of the managing director’s salary: what should it ideally be?

How high should the managing director’s salary ideally be?  What is the maximum with as little tax as possible? Here are a few practical examples: This week a client came to me for advice because he wants to convert his sole proprietorship into a limited liability company and wanted to know …

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Continuation-linked loss carryforward according to 8d KStG in Germany

What does it mean? If there is a detrimental change of shareholders (change of more than 50% of the shareholders), the losses accumulated so far are lost. One way to avoid this is to apply for a continuation-linked loss carryforward. Requirements The prerequisite for this is that the essential core of the activity does …

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Electric company cars

Tax advantages for electric company cars

The following is a brief overview of the #tax #benefits in the area of electric vehicles: Advantages for employees Free or reduced-price charging of the batteries of electric or hybrid electric vehicles at the employer’s premises is tax-exempt according to § 3 no. 46 EStG (German income tax act) if …

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Tax audit Germany

Compliance for the tax audit in Germany

What do the accounting and recording obligations cover?  Basically, a distinction is made between the accounting obligation under commercial law and the accounting obligation under tax law. Every merchant within the meaning of the HGB (German commercial Act) who has to prepare a commercial balance sheet is subject to the accounting …

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Digital package of VAT

As of July 1, 2021, significant changes in the area of VAT have come into effect as part of the implementation of the so-called VAT digital package. The provision of Section 3c UStG previously known as “mail order delivery” will now be renamed “intra-community distance selling”. The place of supply …

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