· Insight

News on the taxation of earn-out payments

Original: “Neues zur Besteuerung von Earn-out-Zahlungen”

In a recent decision, the German Federal Fiscal Court ruled on the taxation of earn-out payments in connection with the sale of a co-entrepreneur's share that profit- and turnover-dependent purchase price components are only taxable at the time of receipt, so that the seller is not entitled to a preferential tax rate in accordance with Section 34 (3) of the German Income Tax Act (“half tax rate”). The article classifies the Federal Fiscal Court case law and provides a general overview of the taxation of earn-out payments.

in: DER BETRIEB Steuerboard,, March 12, 2024
as well as in: DER KONZERN, Issue 04/2024, April 15, 2024, 166-167
Authors: Jannis Lührs