The reorganisation tax decree (UmwStE) dated 11 November 2011 was replaced in a letter dated 2 January 2025. The Federal Ministry of Finance (BMF) has commented on some points of the reorganisation tax law and included further BFH case law in the decree.
In the following, we highlight some of the changes to the new decree that are relevant in practice in the context of transactions or reorganisations:
Amendments to § 3 UmwStG:
With the new UmwStE, Section 3 UmwStG states in writing that the submission of the closing tax balance sheet also constitutes an express declaration that the tax balance sheet should also be the closing tax balance sheet if this balance sheet corresponds to the closing tax balance sheet.
The administration has now included this declaration as an implied application to recognise the book values in the new UmwStE.
Amendments to § 20 UmwStG:
Object of contribution in the event of a change of legal form
- In the case of a change of legal form of a partnership into a corporation, the object of the contribution is the co-entrepreneur’s share.
Contribution of partial co-entrepreneurial shares and functionally necessary SBV
- The tax authorities stipulate that, in addition to the contribution of the entire co-entrepreneur’s share, the contribution of part of a co-entrepreneur’s share is also favoured in accordance with Section 20 (1) UmwStG.
Application for tax retroactivity
- With regard to retroactive effect for tax purposes, the tax authorities now state that the application for retroactive effect for tax purposes pursuant to Section 20 (5) UmwStG is irrevocable in line with BFH case law.
Amendments to § 22 UmwStG:
Trade tax on contribution profit
- In contrast to the view set out in the old reorganisation tax decree, the administration now stipulates that both the contribution profit I and the contribution profit II are not subject to trade tax, provided that the original contribution would not have been subject to trade tax if the fair market value had been recognised.
Lapse of the lock-up period upon sale of the shares received
- In accordance with section 22(2) sentence 5 UmwStG, the lock-up period for contribution gain II does not apply if the transferor sells the shares received. It was previously unclear whether this also applied to book value-neutral conversions. The new UmwStE now clarifies that the blocking period only ceases to apply if the sale leads to the complete realisation of the hidden reserves.
Amendments to § 24 UmwStG
Contribution in return for the granting of company rights
- With reference to BFH case law, posting to a variable capital account on a joint and several tied reserve account or on a mere loan account should not result in the granting of company rights.
We are happy to assist you with reorganisations, transactions and questions relating to reorganisation tax law.
Hannes Hellfeuer | TLI Steuerberater