Waiver of claims by a shareholder

The Federal Fiscal Court clarifies the consequences of the waiver of claims by a partner in a partnership.

In a dispute over profit participation rights claims against a partnership, the Federal Fiscal Court has ruled on the tax consequences of a waiver of claims by the partners and agreed with the opinion of the tax office. In the case in dispute, the partners had acquired the profit participation right claims below their nominal value and subsequently waived the part of the claim that exceeded the acquisition costs. In order to neutralize the income under commercial law from the waiver for tax purposes, they formed an adjustment item in the balance sheet.

The tax office and the Federal Fiscal Court have contradicted this approach: The waiver of the receivable results in a loss of profit in the joint ownership area, which results from the reduction of the liability. The income can also not be neutralized by the creation of a tax adjustment item. The judges justified this decision by stating that the increase in the joint assets resulting from the elimination of the liability is not offset by a contribution or quasi-contribution by the partners.

The principles of corresponding accounting also do not prevent the transaction from having an effect on income. Although a shareholder's claims arising from a loan receivable from the company are not part of the equity to be reported in the company balance sheet, they are part of the shareholder's special business assets, which are treated as equity in the overall balance sheet of the co-entrepreneurship to be formed from the company balance sheet and special balance sheets.

Even if it is certain that such a loan receivable is worthless because it cannot be settled by the company, it follows from its treatment as equity that a value adjustment is not generally considered during the existence of the company. Instead, this loss in the special business assets is generally only realized when the shareholder leaves the company or when the company is terminated.