Employee participation through profit participation rights and silent partnerships: Tax treatment of ongoing profit-sharing arrangements in light of current Federal Fiscal Court (BFH) case law

The Federal Fiscal Court (BFH) has clarified its recent case law: An employee’s ongoing profit-sharing arrangements in connection with a special legal relationship (e.g., profit participation rights or silent partnerships) are not automatically considered wages—even in the case of high returns. The decisive factors remain the legal structure of the special legal relationship and its actual implementation.