In its ruling dated September 28, 2022 (VIII R 20/20), the Federal Fiscal Court (BFH) decided, contrary to the previous opinion of the tax authorities, that a resolution on an incongruent distribution of a limited liability company (GmbH) that deviates from the articles of association is effective under civil law and can be recognized for tax purposes. In its circular dated September 4, 2024, the Federal Ministry of Finance (BMF) adapted its opinion to the case law.
In the case of limited liability companies, the following four cases are to be recognized for tax purposes:
- The distribution is made on the basis of a different profit distribution rule provided for in the articles of association.
- The articles of association provide for the possibility of deciding on a deviating profit distribution rule with the consent of the affected shareholders (opening clause).
- In response to the aforementioned BFH ruling, the BMF states in the revised circular that a resolution passed with the votes of all shareholders that provides for a one-time deviation from the articles of association is also to be recognized for tax purposes. The decisive factor in this context is that the resolution is only passed on a one-time basis—i.e., it is limited to the individual measure; in contrast, a resolution that is intended to apply in the longer term or permanently is to be qualified as an amendment to the articles of association and is therefore only effective and tax-recognizable if it meets the material and formal requirements of an amendment to the articles of association.
- In implementation of the BFH ruling dated September 28, 2021 (VIII R 25/19), a so-called split appropriation of profits or incongruent profit distribution with regard to timing of the distribution is also to be recognized for tax purposes. Per this ruling, profit distribution resolutions according to which profits are distributed to some of the shareholders and the remaining profits are not distributed but rather allocated to the shareholder-related retained earnings are also effective for tax purposes and do not lead to an inflow of capital gains with regard to the retained portion.
In contrast to the regulations for GmbHs, incongruent profit distributions in the case of a stock company are still only to be recognized for tax purposes if a different profit distribution rule has been defined in the articles of association and the distribution is made accordingly.
The new BMF circular replaces the previous BMF circular dated December 17, 2013 and is to be applied in all open cases.
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