Hofmann & Fertig advises companies throughout their entire lifecycle: from the formation and fulfilment of ongoing declaration obligations to the termination of entrepreneurial involvement, for example in the event of sale, restructuring, succession or liquidation.
The interests of companies are regularly not in line with those of the tax authorities. Provided that disputes cannot be settled within an ongoing tax field audit, the rights of companies may have to be enforced in appeal or legal proceedings. In some cases, companies have a special need for protection due to other reasons, for example because the application of certain provisions enacted by the legislator is unclear for constitutional or European law reasons. For years it was unclear whether the so-called restructuring clause of § 8c para. 1a CITA constituted inadmissible state aid under EU law and could therefore not be applied. After years of uncertainty, the ECJ’s ruling of 28.06.2018 clarified this situation. The legislator wants to rehabilitate the restructuring clause on this basis, so to speak. Further information on the application of § 8c CITA can be found here.
When founding a company, questions regularly arise as to the appropriate legal form. Furthermore, investments shall be structured in tax-optimized manner. To finance business ideas, traditional start-ups often organise so-called financing rounds, in which investors usually provide the necessary financial resources in return for shares or silent partnerships.
In the case of cross-border activities of companies, there is basically the opportunity of not recording the same facts but also the risk of the same facts being recorded in two jurisdictions. Germany has concluded conventions for the avoidance of double taxation with most industrialized countries for income tax purposes. These agreements thus form the regulatory basis between the states in order to share the tax substrate between the states in the case of cross-border activities of companies.
The applications are manifold. Essentially, the rights of taxation shall be allocated to one or the other state, for example which portion of the profits of a company shall be allocated to the enterprise and which portion shall be allocated to a permanent establishment; which state has the right to tax dividends, interest or licenses. Can the state of source withhold taxes and, if so, to what extent, and can the taxes withheld be reimbursed or credited in the home country?
When acquiring target companies, investment structures are generally established in which the income from repatriation and sale is burdened as little as possible by taxes. At the target company, the remaining tax risks must be allocated through appropriate tax clauses in the purchase agreement between seller and buyer.
In cases where a company’s equity is almost or already used up and restructuring measures are pending, transaction costs from restructuring such as taxes should be avoided wherever possible in order to protect the proceeds of the company.
This can involve a wide range of tax issues. For example, there are often shareholder loans that shall be restructured in order to prevent the company from over indebtedness. In this context, subordination agreements are regularly concluded or waivers of claims by the shareholders are examined. After the application so-called restructuring decree of the tax authorities was denied by the Federal German Tax Court in 2017 (most recently, for example, Federal German Tax Court resolution of 16 April 2018, X B 13/18), the legislature has now created statutory provisions in sec. 3a ITA and § 7b TTA according to which restructuring profits are not subject to tax under the conditions described therein. However, the provisions of sec. 3a ITA and § 7b TTA can only come into force after approval by the EU Commission.
Hofmann & Fertig advises on the identification and quantification of tax risks in connection with acquisitions in order to determine the purchase price and negotiate the tax clause in the purchase agreements. The scope and intensity of the tax due diligence are determined according to the needs of the acquirer. Depending on the scope of the investment and the possible risks associated with it, the results of the tax due diligence can be summarized in so-called red flag reports or in detailed reports/reports.
In the life cycle of companies, it regularly happens that the initial legal form or structure has to be adapted due to changed framework conditions.
The reasons are manifold. While in some cases personal liability should be limited to the proceeds of a company, in others the structure should be simplified or prepared for possible purchasers or successors. In cases of reorganization, transaction costs such as taxes should usually be avoided wherever possible. In depth know-how and experience are therefore required, particularly in the areas of reorganisation tax and real estate transfer tax law. Here you can see some examples of reorganizations that we have accompanied for tax purposes.
In some cases, legal uncertainties remain despite thorough research undertaken, for example because there are no relevant or contradictory court rulings or opinions provided by the tax authorities. In order to exclude or at least minimize remaining risks, it may in some cases make sense to apply for so-called binding ruling from the responsible tax office. Binding rulings can only be given if it refers to a planned action and therefore was not implemented yet. The tax office charges a fee for processing the binding ruling.
Services for individuals
Hofmann & Fertig advices individuals in national and international tax matters, for example in the context of succession (estate/gifts) or the preparation of ongoing tax returns. Hofmann & Fertig also advises on a project-related basis, e.g. on the tax-optimised acquisition of real estate, expatriates or voluntary disclosure.
Hofmann & Fertig provides services to individuals in particular in the following areas:
Due to the increasing internationalisation of companies, the cross-border deployment of employees is becoming increasingly important. During the preparation and processing of the foreign assignment, many special tax issues arise. Hofmann & Fertig advises private individuals on the taxation of their income, the calculation of tax equalisation procedures/hypothetical taxes, net wage agreements and the taxation of employee remuneration models (e.g. stock options) within the framework of their assignment from Germany abroad or from abroad to Germany. Hofmann & Fertig also provides tax advice to cross-border commuters, expatriates and relocations as well as wage tax treatment by the employer.
Tax provisions are subject to constant reforms. Hofmann & Fertig advises individuals on forthcoming changes to the law with regard on how these changes will affect the current situation, how individuals will benefit or how adverse consequences can be avoided if possible.
Increasingly far-reaching international disclosure practices and information exchanges between jurisdictions as well as relaxed banking confidentiality increase the risk of discovery of untaxed sources. Hofmann & Fertig supports and advises private individuals in the preparation of voluntary disclosures and assists them in criminal tax proceedings.
Tax assessment notices issued by the tax authorities are often not correct. According to statistics from the Federal Ministry of Finance, two out of three appeals are successful. Hofmann & Fertig supports individuals in reviewing their tax assessment notices and asserting their claims in the context of appeal proceedings. If the tax office does not follow the legal opinion of the taxpayer during the appeal proceeding, it is possible to have your tax case resolved before a tax court.
In some cases, legal uncertainties remain despite thorough research undertaken, for example because there are no relevant or contradictory court rulings or opinions provided by the tax authorities. In order to exclude or at least minimize remaining risks, it may in some cases make sense to apply for so-called binding ruling with the responsible tax office. Binding rulings can only be provided by the tax office if it refers to a planned action and therefore was not implemented yet. The tax office charges a fee for processing the binding ruling.
Individuals want to take precautions, transfer their assets to the next generation, have no descendants or looking for solutions as to how the assets can be transferred in a tax-optimized manner or the inheritance has already occurred. Hofmann & Fertig advises individuals in the context of succession planning as well as in inheritance cases; more information can be found here.
Hofmann & Fertig advises individuals on the tax consequences of relocating their domicile and declaring their income in Germany. Hofmann & Fertig has an international network and are able to provide cross-border solutions.
Individuals who intend to move from Germany to another country or move from abroad to Germany often face tax consequences. Hofmann & Fertig advises individuals on the tax consequences of relocating their domicile and declaring their income in Germany. This may apply, for example, in cases in which an individual intending to change its residency holds a significant interest in a corporation. Therefore, the change of residency should be carefully planned in advance.
If individuals own assets in another jurisdiction or earn foreign income, or if they intend to move from Germany to another jurisdiction or vice versa, international tax provisions apply. In cross-border situations, questions concerning international tax law are relevant; often conventions for the avoidance of double taxation between Germany and the respective country must also be taken into account. Hofmann & Fertig has the relevant expertise to represent individuals in international tax matters.
Hofmann & Fertig supports private individuals in preparing their current income tax returns, corporate and trade tax returns, VAT returns, inheritance tax returns and gift tax returns.
Hofmann & Fertig provides support in the acquisition and sale of real estate (income tax, real estate transfer tax, value added tax), in the ongoing determination of income, also in case when real estate is held through transparent or intransparent vehicles, in the context of succession planning and in the valuation of real estate.
During an acquisition, holding and modernisation of real estate assets, tax planning options can be used. Tax arrangements are also particularly suitable for arrangements between close relatives, for example when real estate is rented to family members.
Hofmann & Fertig advises individuals on tax-optimised structuring of their affairs.
According to supreme court rulings, it is generally accepted that relatives who typically lack a conflict of interests are allowed to structure their legal relationships among themselves as favourably as possible from a tax perspective and that the motive of saving taxes does not yet make a tax structure inappropriate. A legal form is usually only inappropriate if the taxpayer does not use the form envisaged by the legislator to achieve a certain economic goal, but instead chooses an unusual or artificial way in which the goal is not to be attainable according to the assessments of the legislator.
Individuals often receive severance payments within the course of employer restructuring programmes. Hofmann & Fertig advises private individuals on the tax effects of severance payments, including cases when individuals intend to change their residency.
Tax field audits are also permissible, for private individuals with high income. This applies in particular to individuals with annual income in excess of EUR 500,000. Since 2010, individuals are obliged to keep tax-relevant records and documents for six years. Hofmann & Fertig supports individuals during tax field audits carried out by the tax authorities.
Hofmann & Fertig accompanies you as an entrepreneur or individual throughout Germany in the (tax-optimised) transfer of your company assets or private assets during your lifetime or from death. After identifying your wishes and needs, Hofmann & Fertig will show you tailored solutions for the transfer of your assets and implement them together with you. Early planning is essential for a successful handover.
Hofmann & Fertig also advises heirs and gift recipients on tax issues following the transfer of assets, e.g. when it comes to preparing tax returns or issues such as inheritance disputes, foreign assets or legacies.
Hofmann & Fertig advises you in particular on the following topics:
Hofmann & Fertig supports you in the valuation of your private assets, such as shares in asset-managing companies or real estate assets, for example in the context of inheritances and gifts or in divorce proceedings.
Hofmann & Fertig prepares inheritance tax returns for you and carries out the necessary valuations of your inherited assets.
Hofmann & Fertig will show you tax planning options for transferring your company assets to the next generation or a nonfamily member. Corporate reorganization may be required, intense discussions with family members or finding a buyer, which requires timely planning.
The number of real estate owners in Germany is increasing. Hofmann & Fertig supports you in transferring real estate assets held, as private assets or via asset management companies in a tax-optimised manner. You will be shown individual options tailored to your needs, also with regard to the use of the family members as a tax-saving transfer model.
Not only since the implementation of the EU Succession Regulation (No. 650/2012) in 2012, there is an increasing number of cases in which not only German inheritance and tax law applies, but also foreign law is involved. This can lead to a bad awakening in the case of international inheritances and gifts, so that in these cases early consideration must be given. Hofmann & Fertig advises in cross-border succession planning.
Hofmann & Fertig provides advice in the context of cross boarder situations such as children study or live abroad, companies are set-up in a foreign jurisdiction, you receive foreign assets or a relocation of someone’s residency is intended or a second residency abroad is maintained, e.g. in order to spend your old age abroad. Adverse (tax) consequences can occur for example if you established your last will in accordance with German law but spend the majority of your time abroad, e.g. in Spain. Hofmann & Fertig advises you in these cases with regard to the tax effects and show you ways in order to optimize your affairs.
What happens if you suddenly fail as an entrepreneur?
The emergency kit is recommended in case of unforeseen temporary failure or death.
• Important information is often bundled in one person and is usually not documented. In the event of a failure or death of the entrepreneur, successors or representatives often find it difficult to obtain the necessary information and documents. This could jeopardize the continuation of the company. There may be a risk of customer churn or a reduction in the value of the company. To prevent this, it is advisable to create an emergency case.
• The emergency kit contains all important information and documents such as information about a possible will, appointment of a representative, passwords, important contracts, customer information.
• The emergency kit can, for example, be set up in a physical folder but also in a digital form.
An emergency case is successful when it is tailor made and thus covers all the special features of the individual case. Based on experience, the creation of an emergency kit during the lifetime of an entrepreneur is generally an easy and routine task whilst it can be a very challenging and time-consuming effort for the representatives or successors. Further, there is also the risk of company downtime.
We will be happy to support you in creating your individual emergency kit.
Hofmann & Fertig will advise you on tax optimized transfers of your private assets. You will be shown options for transferring your assets, such as securities, life insurance policies, real estate, shares in, for example, asset-managing partnerships or family homes, e.g. within the framework of anticipated succession. Your future financial needs should also always be taken into consideration, assets can already be transferred and yet you can still reserve further income from this, for example with usufruct arrangements.
Even if you have no children and thus no direct descendants, or if you do not wish to consider family members who are entitled to inherit by law, Hofmann & Fertig will show you options to transfer your accumulated assets so that the assets are ideally not reduced by taxes. In these cases, the establishment of a foundation may be an interesting solution.
Hofmann & Fertig also advises future heirs and gifted persons, if you will receive assets and tax related questions arise.
Hofmann & Fertig lässt Sie „Probesterben“. Auch wenn es zunächst etwas skurril klingt, hilft es den Erbfall und die daraus folgenden steuerlichen Konsequenzen zu simulieren, um eventuellen Handlungsbedarf aufzudecken. Wenn es zu einem plötzlichen Ausfall des Unternehmers kommt oder auch der Privatperson, kann es zu unerwünschten steuerlichen bzw. erbrechtlichen Folgen kommen, die bislang unbeobachtet geblieben sind.
Hofmann & Fertig schaut sich gemeinsam mit Ihnen zu Beginn des Probesterbens an, welche Vermögenswerte vorhanden sind und welche Vorkehrungen Sie bislang getroffen haben. Auf dieser Grundlage werden Ihnen die erbrechtlichen und erbschaftsteuerlichen Konsequenzen aufgezeigt. Oftmals spiegelt sich in diesem Ergebnis nicht ihr Wunsch wieder. Lesen Sie hierzu unseren Beitrag für einen Unternehmer. Für eine Privatperson beispielsweise kann es zu unliebsamen Überraschungen kommen, wenn das Vermögen auf Familienmitglieder übergehen würde, die sie auf keinen Fall bedenken möchte.
Das Probesterben ist die Basis für die Gestaltungsberatung. Hofmann & Fertig zeigt Ihnen Gestaltungsmöglichkeiten auf, welche Ihren individuellen Wünschen und Bedürfnissen entsprechen.
Hofmann & Fertig zeigt Ihnen die steuerlichen Folgen ihrer gewählten Testamentsregelung auf oder unterstützt Sie bei den steuerlichen Aspekten beim Aufsetzen eines Testaments. Ein Großteil der selbstverfassten Testamente sind unwirksam, weil beispielsweise die Form nicht eingehalten wurde. Es kommt immer wieder zu Streitigkeiten in der Familie, weil Testamente ausgelegt werden müssen, da diese nicht sauber verfasst wurden. Dies kann zu langjährigen Streitigkeiten führen. Hierfür existieren genug Beispiele hinsichtlich bekannter Persönlichkeiten in den Medien.
Das Berliner Testament beispielsweise ist aus steuerlicher Sicht oftmals nicht empfehlenswert, weil hierdurch Erbschaftsteuer entsteht, welche vermieden werden könnte. Mehr dazu siehe hier.
Hofmann & Fertig zeigt Ihnen die steuerlichen Folgen Ihres gewählten bzw. gewünschten Güterstandes auf. Ehegatten beispielsweise im Güterstand der Gütertrennungen verschenken den steuerfreien Zugewinnausgleich im Erbfall. Hier würde sich eventuell eine (modifizierte) Zugewinngemeinschaft anbieten.
Auch die sogenannte Güterstandsschaukel ist ein von der Finanzverwaltung anerkanntes Modell um Vermögen steuerschonend an den Ehegatten zu übertragen. Hat beispielsweise ein Ehepartner, welcher im gesetzlichen Güterstand der Zugewinngemeinschaft lebt, ein Vermögen von 2 Million Euro und der andere Ehepartner kein Vermögen und möchte Erstgenannter auf seinen Ehepartner Vermögen über den Freibetrag von 500.000 Euro hinaus übertragen, würde im Falle der Übertragung Schenkungsteuer anfallen. Um diese Schenkungsteuer zu umgehen, kann das Ehepaar durch notariellen Vertrag vom Güterstand der Zugewinngemeinschaft in den Güterstand der Gütertrennung übergehen. Hierdurch wird der Zugewinnausgleichsanspruch ausgelöst, der nicht der Schenkungsteuer unterliegt. Danach kann das Ehepaar wieder in den Güterstand der Zugewinngemeinschaft wechseln. Somit könnten 1 Million Euro auf den anderen Ehepartner steuerfrei übertragen werden.
Hofmann & Fertig führt für Sie als Unternehmer, Käufer, Verkäufer, Erbe, Beschenkten oder aber auch als Leistung für Steuerberater, Rechtsanwälte oder Notare die Bewertung von Unternehmen durch. Angefangen über das vereinfachte Ertragswertverfahren, über eine modifizierte IDW S1 Bewertung bis hin zum IDW S1. Da das Verfahren nach IDW S1 nicht immer gefordert und dieses Verfahren recht aufwendig ist und teilweise auch keine anderen Ergebnisse liefert als einfachere Verfahren bietet Ihnen Hofmann & Fertig zunächst eine sogenannte Wertindikation an. Dieses Verfahren überprüft den nach dem vereinfachten Ertragswertverfahren ermittelte Unternehmenswert und ist kostengünstiger als ein komplettes IDW S1 Gutachten.
Hofmann & Fertig erstellt für Privatpersonen Anträge auf verbindliche Auskunft, um mögliche Rechtsunsicherheiten nach Möglichkeit im Vorfeld auszuräumen. Teilweise lassen sich Sachverhalte steuerlich nicht abschließend einschätzen. Daher bietet die Finanzverwaltung die Möglichkeit, für geplante aber noch nicht verwirklichte Sachverhalte eine verbindliche Auskunft zu beantragen und die steuerlichen Folgen abzuklären.
With the diversity of tax issues and the speed of change, it is often difficult to keep up to date on all issues. In addition to day-to-day business, familiarizing oneself with a new area of tax law often requires non-existent capacities. Hofmann & Fertig offers in particular for tax consultants, companies, private individuals, lawyers and notaries the service of answering project-related questions in the form of an expert opinion and thus relieving you in your daily business. We are regularly consulted to review an existing opinion and give a second opinion. In doing so, we assess questions of tax structuring but also provide advice in the classic case of defence, for example in the context of tax audits and appeal or court proceedings. Our core expertise exists in the following fields:
- (International) corporate tax law
- Reorganization of companies
- (International) income tax
- (International) Inheritance and gift tax
We are guided by your needs, i.e. you decide whether we work for you in the background or get in direct contact with the other party and what scope the expert opinion should have. Discretion and mandate protection are the basis of a trusting cooperation for us.
Our partners and employees are proven experts in their fields of practice and are certified advisors for international tax law as well as succession and regularly publish articles on current topics. We look forward to hearing from you.