Tax Aspects of Buying a German GmbH: Share Deal vs Asset Deal
The choice between a Share Deal and an Asset Deal when acquiring a German GmbH has dramatically different tax consequences for both buyer and seller. Buyers strongly prefer Asset Deals for the depreciation step-up over 15 years that reduces future taxable income, while sellers prefer Share Deals for their more favorable capital gains treatment. This guide explains German corporate tax, trade tax (Gewerbesteuer), VAT treatment, Goodwill amortization rules, real estate transfer tax (Grunderwerbsteuer), loss carryforward restrictions under § 8c KStG, Organschaft tax consolidation, and provides worked numerical examples to quantify the tax cost and benefit of each structure.
## Tax Aspects of Buying a German GmbH: Share Deal vs Asset Deal Buying a German GmbH is a tax exercise as much as a commercial one. The structural choice between share deal and asset deal carries multi-million-euro consequences for both buyer and seller, and the wrong choice locked into the LOI often cannot be unwound when the tax adviser arrives ten weeks later. The structural choice should be made by the tax adviser in week one, not by the M&A adviser in week ten. This guide walks through the German tax treatment of share deals and asset deals for buyers and sellers, pitched at the level an…