What is German exit taxation and who does it affect?

Anyone holding at least 1 per cent of a corporation falls under section 17(1) sentence 1 of the Income Tax Act. When unlimited tax liability ends, section 6 of the Foreign Tax Act treats those shares as if they had been sold at fair market value. A gain that was never received is therefore taxed. The rule catches anyone subject to unlimited tax liability for at least seven of the past twelve years. For shareholders in a German GmbH this is regularly the largest single item of a departure. The examination belongs before the decision, not after it. General information, not tax advice.