Sale Price or Salary – Federal Fiscal Court on Compensation for Continuing to Serve as Managing Director Upon the Sale of Shares

The Federal Fiscal Court (BFH) has clarified the position of shareholder-managing directors in share sales: a payment tied to the continuation of the managing director’s role is not automatically considered wages. Rather, the decisive factor is whether that component of the compensation is economically reflected in the company’s value—a consideration of significant relevance for the tax structuring of M&A transactions.