Life goes on!
Restructuring presents a special challenge for lawyers and entrepreneurs. If your company is no longer enjoying economic success and needs to get back on track, comprehensive restructuring may be necessary – but often the necessary steps are taken well in advance. In any case, taxes are not the focus when it comes to restructuring. The key players are instead banks, suppliers and employees.
Nevertheless, as dual-profession lawyers and tax consultants, we too can play a pivotal role in the recovery of your company.
An important aspect of all restructuring measures is the retention of loss carryforwards. Transfers of shares in the course of restructuring can namely lead to a loss of loss carryforwards. By skillfully structuring every process, we can often considerably offset this for you.
Corporate restructurings tend to be successful only if creditors waive claims in whole or in part, or if assets are transferred to the company by other means. This can, however, result in a reorganisation gain for the company. The debt relief then becomes a taxable profit, triggering a tax on income. This may contradict economic common sense, but unfortunately it is the current legal situation.
We can support you as lawyers and tax consultants by designing the necessary steps as to avoid income taxes as much as possible.
In addition, the German Income Tax Act (Section 3a EStG) provides, under certain conditions, for gains to remain tax-free in the event of reorganisation measures. Although this regulation is still subject to approval by the European Commission under state aid law, it currently looks as if this proviso could soon be dropped. We would be happy to assist you in meeting the requirements of this regulation.
In suitable cases, we can also seek to coordinate matters with the tax authorities by obtaining a binding assessment to avoid nasty surprises subsequent to the completion of restructuring. If you have enough time to obtain a binding assessment, this approach could provide you with the best sense of security. Even if there is not enough time, we can request an informal consultation with the tax authorities.
Future corporate structure
Life will go on after restructuring. To this end, we ensure during restructuring that your company will have a favourable tax structure when it makes profits in future. With this in mind, let us optimise your company regarding taxation!