Inflow of royalties in the event of delayed adoption of the annual financial statements

If the annual financial statements are adopted late, the tax office may not assume a fictitious inflow of bonuses already at the time when the annual financial statements should have been prepared.

Bonuses are part of taxable wages. However, taxation of such bonuses is subject to the condition that they have actually accrued to the employed managing director. The German Federal Fiscal Court (Bundesfinanzhof) has now ruled that late adoption of the annual financial statements does not automatically lead to an advance payment of the bonus, even in the case of a controlling shareholder-managing director, to the date on which the bonus would have become due if the annual financial statements had been prepared on time. Only the adoption of the annual financial statements by the shareholders' meeting makes the financial statements binding. In addition, the individual regulations on bonuses in the Articles of Association and in the employment contract of the managing director are relevant.