StartInternat. Tax LawExit Tax

Exit Tax

There can be numerous reasons for people to leave Germany and move to another country or to set up a second residence abroad. However, the tax implications of such a move or the establishment of a second residence can be just as diverse. In this case, what is called “exit tax” in international tax law and under which the taxpayer has to pay taxes upon leaving the country is particularly relevant.

Therefore, we recommend that, if you are planning to move abroad, you should seek professional advice from experienced lawyers, tax law specialists and international law consultants to check whether, in your case, there is a risk of exit tax and, if so, whether there are options to avoid taxation. From our day-to-day practice we know that because of the complexity of international tax law the parties concerned often do not even realise that they are about to fall into a tax trap. As a result, their current tax adviser either does not learn of a possible problem in connection with exit tax in Germany or does not have any practical experience relevant in this very specific subject. For this reason, criminal tax proceedings in connection with exit tax have increased in recent years, with very unpleasant consequences since, in many cases, very large amounts are involved. Moreover, in many cases, ignorance really applies in connection with exit tax. However, the old adage also applies in these cases: “Ignorance is no defence in these matters!“ 

What exit tax is designed to cover and how it does that

How is the term “exit tax” defined?

Why is there an exit tax?

When can the exit tax be triggered?

Exit tax in cases of international gifts and inheritances

What is assumed as the fictitious sales price for exit tax?

Does a temporary absence also trigger exit tax?

How can exit tax be avoided?

Exit tax within the European Union

Are there facilitations regarding exit tax even if the relocation does not take place within the EU?

How is 50i EStG connected to exit tax?

At LHP Luxem Heuel Prowatke, specialist attorneys for tax law and international tax law specialists have successfully provided practical advice in international tax law regarding exit tax for many years. 

For more than two decades the LHP partners have exclusively and consistently provided advice in tax law, criminal tax law, disputed tax law and the tax-relevant legal fields of inheritance and company law. International tax law forms a special focus in this. If you are planning to move abroad or come into contact with a border-crossing matter in any other constellation, we recommend you to seek professional tax law advice as early on as possible. Based on our long-standing experience in international tax law, we advise our clients on international matters in tax and company law every day. As a result, we are very familiar with the pitfalls and complications in this field. Even after the introduction of the new section 50i EStG, various design options are possible to legally avoid taxes, such as e.g. a change of form, a change of structure, a contribution or a share swap. In the framework of our individual consultation, we will discuss the matter to be evaluated as well as the further tax and company law approach for your company and, of course, you in person together with you.

LHP: Attorneys at Law, Tax Law Specialists, Tax Advisers PartmbB

Cologne

An der Pauluskirche 3-5, 50677 Cologne,
Telephone: +49 221 39 09 770

Zurich

Tödistrasse 53, CH-8027 Zurich,
Telephone: +41 44 212 3535