Knowledge
22 Minute
“If you move abroad with a company, you automatically pay exit tax.” This blanket statement is wrong. I test it in the fourth part of the foreign company series because it mixes two different levels: the participation of a person and the assets of a company.
The exit tax according to § 6 AStG concerns, under its legal conditions, shares within the meaning of § 17 (1) sentence 1 EStG. In the case of operating assets, other rules of unbundling may apply, in particular § 4 (1) sentence 3 EStG. A private move alone therefore answers neither the question of the relevant law nor of an actually arising tax.
Test status: 22. September 2026. This article explains the demarcation from the German point of view. It does not replace a tax assessment of the individual departure.
Which shares are covered by § 6 AStG?
Section 6(1) AStGZZZ expressly refers to shares within the meaning of § 17 (1) sentence 1 EStG. This does not mean a flat-rate tax on every company, business or asset of a moving person.
After § 17 (1) sentence 1 EStG it depends on a direct or indirect participation of at least one percent in the capital of a corporation within the last five years. One percent is sufficient; A majority shareholding is not required. Even a now lower quota can remain relevant if the threshold has been reached within this period. Today’s list of shareholders is therefore not enough.
For foreign legal forms, their tax classification must first be clarified. The foreign designation does not automatically determine whether a corporation exists in the German tax sense. In the case of shares acquired free of charge, § 17 also contains special rules for legal predecessors.
The removal of the shareholder and the relocation of a company are separate operations. A company can continue to work at the previous location, while the requirements of § 6 change for its shareholder. Conversely, a new business address alone does not declare taxation of the private shareholder.
What is the duration of unlimited tax liability?
§ 6(2) AStG requires, in principle, a natural person who has been subject to unlimited taxation within the meaning of § 1(1) EStG for at least seven years within the twelve years preceding the relevant event. The seven years must come together within this window; the law does not require a continuous seven-year phase immediately before the departure.
The participation examination over five years and the residency examination over twelve years are two different examinations. Nor does this rule generally require that the same shares have been held for seven years. Whoever mixes these periods can already arrive at a wrong result in the preparation.
In the case of free acquisition, according to § 6 (2), the relevant periods of legal predecessors must also be included. At the same time, existing times count only once. In addition, sentence 4 contains a special rule for cases in which a former tax liability under the return scheme has ceased. “Not even seven years of your own” is therefore not a reliable all-clear.
§ 1(1) EStG in principle refers to residence or habitual residence in Germany. A reporting deregistration does not replace their examination. Whether an available apartment continues to create a residence depends on the actual circumstances and Section 8 AO.
What event can trigger taxation?
§ 6 (1) AStG equates three operations of a sale at common value:
- Unlimited tax liability ends as a result of the cessation of residence or habitual residence.
- Shares are transferred free of charge to a taxable person who is not unlimited.
- The German taxation law with regard to the profit from the sale of shares is excluded or limited insofar as the previous events do not have priority effect.
Thus, the test can also be necessary without classical removal. In the case of several residences, the residence in accordance with the relevant double taxation agreement and the effects on German taxation law must also be examined. A retained apartment is not a general protection against § 6.
The mechanism explains the liquidity issue: a tax sale fiction does not require an actual buyer and no sales proceeds. However, this does not result in a fixed tax level. Valuation, acquisition costs and other tax rules only determine the concrete calculation.
Why business assets need their own audit
Section 6 is expressly subject to other provisions, including the Income Tax Act. In the case of business assets, it is therefore necessary to check separately whether the de-knitting rules are relevant. An operating participation may not be treated as a private participation without examination.
§ 4 (1) sentence 3 EStG constitutes the exclusion or restriction of the German taxation law with regard to the profit from the sale or use of an economic good as an extraction. Sentence 4 mentions in particular the change of assignment from a domestic to a foreign permanent establishment.
This is about the individual economic asset and its tax allocation. The threshold of one percent and the period of seven within twelve years from the test described above are not general access requirements. In the event of a relocation, other provisions may also be applicable.
I would therefore ask for two inventories: What shares does the person hold in which area of assets? Which business assets actually change their classification or are subject to changed taxation rights? Only this separation prevents an incorrect blanket tax consequence from being derived from the word “company”.
My decision path for preparation
For organizational preparation, I use a simple process. He provides documents for the professional review, no tax release:
- Allocate assets: Accounting for holdings and operating assets separately. Expressly mark unclear assignments.
- Participation history shows: Document quotas, indirect holdings, acquisition data and free transfers.
- Reconstruct tax hours: compile residences, stays, previous departures and, where appropriate, legal predecessors with dates.
- Describe the planned operation: Separate private relocation, donation, changed residence or operational relocation.
- Check evaluation and payment consequences: reconcile acquisition costs, value documents, available liquidity and possible applications before implementation.
This preparation is part of the Methodology of inventory and coordination. The larger connection with other types of assets and structural issues deals with the General contribution to the exit tax.
What are the limits on rates and returns?
§ 6 paragraph 4 allows for seven equal annual installments on request, usually against security. Certain events may make the remaining tax due early. The return regime in paragraph 3 is also subject to several conditions. Neither a return intention nor an installment application therefore automatically eliminates the tax burden.
For earlier operations, the transitional provisions in Section 21 AStGZ to be observed. Notification obligations also belong in the professional examination. Investment shares and other special rules are not the subject of this narrowly limited contribution.
My practical consequence: Before moving, the asset type, period and trigger must be determined. I am neither a lawyer nor a tax consultant. The legal classification and tax calculation belong to licensed professionals. A foreign company alone provides neither a tax exemption nor proof of an automatically arising exit tax.
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