Tax & Legal

A management bonus for the majority shareholder and managing director of a limited liability company (GmbH) which is not recorded as a liability in the certified annual financial statements is not immediately subject to income tax, even if it is mandatory under generally accepted accounting principles to record a liability to this effect in the (certified) financial accounts.

The Supreme Tax Court has held that the tax-free employee share benefit is restricted to those employees with an actual benefit in the given year and cannot be claimed lump-sum for all employees participating in the programme.