29 comments

mamonster8 days ago
>Other costs (total: 2.6k€): Notary: Changing company address and CEO: 1.5k€ Notary: Changing company suffix from UG to GmbH: 1.1k€

This is absolutely crazy. For comparison, below are the costs in Switzerland (and you can do all the things yourself by writing a letter signed by the authorized persons, so add whatever your time costs):

https://www.fedlex.admin.ch/eli/cc/2020/180/de

leonidasrup8 days ago
The important sentence in the article is:

" I own a few companies which means I'd be hit by the German exit tax. "

We don't know how many companies does he own.

We can look into exit tax rate, in different countries:

Germany: effective tax rate of up to roughly 28.5%

Japan: CGT rate is 20.315%

Israel: Standard CGT rate is 25%

Austria: Standard CGT rate is 27.5%

https://en.wikipedia.org/wiki/Exit_tax

olieidel7 days ago
The tax rate is one thing, but the way your companies are valued before multiplying that valuation with the tax rate is another thing.

Germany values your companies at 13.75 * earnings by default.

If you prefer to provide an alternate valuation, you're looking at valuation costs of at minimum 10k€ per company (Wirtschaftsprüfer).

leonidasrup8 days ago
It's very good you mention Switzerland, as the contemporary German exit tax legislation traces back to the scandal with Helmut Horten, a department-store magnate who moved to Switzerland in 1968, sold his business stake and paid virtually no tax. The event prompted enactment of the Foreign Tax Act (Außensteuergesetz) in 1972, whose exit-tax provision (§ 6 AStG) is nicknamed lex Horten.
olieidel7 days ago
Yep. The broader question for society is whether to introduce legislation which will make everyone suffer because a few individuals abused it in the past.

I don't have a perfect answer to that, but we can at least observe that most people nowadays affected by the German exit tax are not rich department store owners who planned to move to Switzerland to optimize their company sale taxation.

Most people I talk to are other founders who own a small business, and the overall bureaucratic complexity and tax advisor costs are cost-prohibitive for leaving the country.

ShadowOfThePit8 days ago

   Change or add company address
   "Änderung des Rechtsdomizils oder einer zusätzlichen Adresse"
   30 CHF

   Change CEO
   "Eintragung, Änderung oder Löschung von Personenangaben oder der Funktion einer Person"
   20 CHF

   Changing company suffix
   "Umwandlung in eine juristische Person"
   420 CHF

   Deletion (from the registry) due to leaving the country
   "Löschung infolge Wegzugs ins Ausland"
   210 CHF

Switzerland uses an exit tax I don't quite understand. The companies "hidden reserves" are valued and taxed about at about 17%. Those include the "goodwill" you have generated over the years, which is similar, but not the same, as the market value.
4ndrewl8 days ago
"I wanted to move to Thailand to live with my girlfriend. I own a few companies" seems like tiny violin territory...
olieidel7 days ago
How about we switch - you move to Germany and get barred from leaving the country.

I look forward to your blog post.

4ndrewl6 days ago
I'd just sell the companies?
toomuchtodo8 days ago
voxic117 days ago
Those only apply if you renounce your citizenship, not if you simply change your country of residence. However, unlike Germany, the US taxes its citizens regardless of their country of residence so renouncing your citizenship and paying that exit tax is the only way to stop being responsible for paying US taxes.
cc62cf4a4f208 days ago
These types of taxes are common and logic is simple, you have capital gains that accrued during the time you were tax resident in Germany. By rights the taxes on those gains are due to the German state. So you need to do a deemed disposition and pay the relevant taxes.

I had to do the same when moving country and it’s right.

ahazred8ta7 days ago
They wanted him to pay almost six years worth of his normal post-tax income. Did you have to pay six years worth of income? It took him a lot of work to get it down to 'only' 18.7k€.

This ranks right up there with the author who wrote a children's book about a village where they had to turn over 102% of the potatoes they grew. https://en.wikipedia.org/wiki/Pomperipossa_in_Monismania

KetoManx647 days ago
It's idiotic. You spend your life paying taxes that go to fund programs that decrease your rights and inflate away your savings and then when you want to leave they request that you then give them another cut just because you were born in the country and provided value to the world.

Read the full thread on Hacker News →

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