{"id":43846,"date":"2018-11-26T11:20:35","date_gmt":"2018-11-26T09:20:35","guid":{"rendered":"https:\/\/newserver.fyb.de\/produkt\/on-the-taxation-of-management-shareholdings-for-advisory-boards-and-consultants\/"},"modified":"2018-11-26T11:20:35","modified_gmt":"2018-11-26T09:20:35","slug":"on-taxation-of-management-investments-for-advisory-counselors","status":"publish","type":"product","link":"https:\/\/www.fyb.de\/en\/produkt\/on-taxation-of-management-investments-for-advisory-counselors\/","title":{"rendered":"On the taxation of management shareholdings for advisory boards and consultants"},"content":{"rendered":"

Dr. Barbara Koch-Schulte<\/strong> \u2014 Attor\u00adney at Law, Tax Advi\u00adsor and Part\u00adner at P+P P\u00f6llath + Part\u00adners, Munich<\/p>\n","protected":false},"excerpt":{"rendered":"

Manage\u00adment invest\u00adments are part of almost every private equity inves\u00adtor\u2019s invest\u00adment. Howe\u00adver, consul\u00adtants and advi\u00adsory board members are often given the oppor\u00adtu\u00adnity to parti\u00adci\u00adpate on the same or simi\u00adlar terms as manage\u00adment. While there are alre\u00adady a number of court decis\u00adi\u00adons on the taxa\u00adtion of sala\u00adried mana\u00adgers with such equity inte\u00adrests, this has not yet been the case for the taxa\u00adtion of advi\u00adsory boards and consul\u00adtants. The Tax Court of Baden-W\u00fcrt\u00adtem\u00adberg has now deci\u00added a first case on June 26, 2017 (- 8 K 4018\/14).<\/strong><\/p>\n

In prin\u00adci\u00adple, proceeds from manage\u00adment equity invest\u00adments are subject to taxa\u00adtion as capi\u00adtal assets and thus to the redu\u00adced tax rate of the final with\u00adhol\u00adding tax and, in the case of equity invest\u00adments of 1% or more, to the so-called partial income proce\u00addure. Under certain condi\u00adti\u00adons, howe\u00adver, taxa\u00adtion at the normal income tax rate is also possi\u00adble if the proceeds are attri\u00adbu\u00adted to the mana\u00adger\u2019s employ\u00adment as income from employ\u00adment. In compa\u00adri\u00adson to taxa\u00adtion as income from
\ncapi\u00adtal assets, this is asso\u00adcia\u00adted with an addi\u00adtio\u00adnal tax burden of approx. 20% (top income tax rate 45% versus final with\u00adhol\u00adding tax of 25%).<\/p>\n

The ques\u00adtion of whether, and if so under what condi\u00adti\u00adons, advi\u00adsory boards or consul\u00adtants can also be inves\u00adtors in manage\u00adment share\u00adhol\u00addings has not yet been clari\u00adfied by case law.
\nmust reckon with the fact that their proceeds will be attri\u00adbu\u00adted to income from self-employed work as remu\u00adne\u00adra\u00adtion for acti\u00advi\u00adties in accordance with Section 18 of the German Income Tax Act (EStG). In the prac\u00adtice of tax audits, it is some\u00adti\u00admes found that the tax autho\u00adri\u00adties do not diffe\u00adren\u00adtiate between mana\u00adgers and advi\u00adsory boards in these cases.<\/p>\n","protected":false},"featured_media":23862,"comment_status":"open","ping_status":"closed","template":"","meta":{"wp_typography_post_enhancements_disabled":false},"product_brand":[],"product_cat":[2452,2457,2480],"product_tag":[1463,1480,1489,1498,1502,1509,1515],"class_list":{"0":"post-43846","1":"product","2":"type-product","3":"status-publish","4":"has-post-thumbnail","6":"product_cat-ebook-en","7":"product_cat-fyb-2019","8":"product_cat-dr-barbara-koch-schulte-en","9":"product_tag-management-shareholdings","10":"product_tag-private-equity-investor-en","11":"product_tag-equity-investments","12":"product_tag-settlement-tax","13":"product_tag-partial-income-procedure","14":"product_tag-dr-barbara-koch-schulte-en","15":"product_tag-pp-poellath-partners-en","16":"pa_ausgabe-deutsch-en","17":"pa_ausgabe-englisch-en","19":"first","20":"outofstock","21":"taxable","22":"shipping-taxable","23":"purchasable","24":"product-type-variable"},"yoast_head":"\nOn the taxation of management shareholdings for advisory boards and consultants - FYB Financial Yearbook<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.fyb.de\/en\/produkt\/on-taxation-of-management-investments-for-advisory-counselors\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"On the taxation of management shareholdings for advisory boards and consultants - FYB Financial Yearbook\" \/>\n<meta property=\"og:description\" content=\"Management investments are part of almost every private equity investor's investment. However, consultants and advisory board members are often given the opportunity to participate on the same or similar terms as management. While there are already a number of court decisions on the taxation of salaried managers with such equity interests, this has not yet been the case for the taxation of advisory boards and consultants. The Tax Court of Baden-W\u00fcrttemberg has now decided a first case on June 26, 2017 (- 8 K 4018\/14). In principle, proceeds from management equity investments are subject to taxation as capital assets and thus to the reduced tax rate of the final withholding tax and, in the case of equity investments of 1% or more, to the so-called partial income procedure. Under certain conditions, however, taxation at the normal income tax rate is also possible if the proceeds are attributed to the manager's employment as income from employment. In comparison to taxation as income from capital assets, this is associated with an additional tax burden of approx. 20% (top income tax rate 45% versus final withholding tax of 25%). The question of whether, and if so under what conditions, advisory boards or consultants can also be investors in management shareholdings has not yet been clarified by case law. must reckon with the fact that their proceeds will be attributed to income from self-employed work as remuneration for activities in accordance with Section 18 of the German Income Tax Act (EStG). In the practice of tax audits, it is sometimes found that the tax authorities do not differentiate between managers and advisory boards in these cases.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.fyb.de\/en\/produkt\/on-taxation-of-management-investments-for-advisory-counselors\/\" \/>\n<meta property=\"og:site_name\" content=\"FYB Financial Yearbook\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.fyb.de\/wp-content\/uploads\/2018\/11\/koch-schulte.png\" \/>\n\t<meta property=\"og:image:width\" content=\"334\" \/>\n\t<meta property=\"og:image:height\" content=\"298\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.fyb.de\/en\/produkt\/on-taxation-of-management-investments-for-advisory-counselors\/\",\"url\":\"https:\/\/www.fyb.de\/en\/produkt\/on-taxation-of-management-investments-for-advisory-counselors\/\",\"name\":\"On the taxation of management shareholdings for advisory boards and consultants - FYB Financial Yearbook\",\"isPartOf\":{\"@id\":\"https:\/\/www.fyb.de\/en\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.fyb.de\/en\/produkt\/on-taxation-of-management-investments-for-advisory-counselors\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.fyb.de\/en\/produkt\/on-taxation-of-management-investments-for-advisory-counselors\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.fyb.de\/wp-content\/uploads\/2018\/11\/koch-schulte.png\",\"datePublished\":\"2018-11-26T09:20:35+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/www.fyb.de\/en\/produkt\/on-taxation-of-management-investments-for-advisory-counselors\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.fyb.de\/en\/produkt\/on-taxation-of-management-investments-for-advisory-counselors\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.fyb.de\/en\/produkt\/on-taxation-of-management-investments-for-advisory-counselors\/#primaryimage\",\"url\":\"https:\/\/www.fyb.de\/wp-content\/uploads\/2018\/11\/koch-schulte.png\",\"contentUrl\":\"https:\/\/www.fyb.de\/wp-content\/uploads\/2018\/11\/koch-schulte.png\",\"width\":334,\"height\":298},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.fyb.de\/en\/produkt\/on-taxation-of-management-investments-for-advisory-counselors\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.fyb.de\/en\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"FYB Shop\",\"item\":\"https:\/\/www.fyb.de\/en\/shop\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"On the taxation of management shareholdings for advisory boards and consultants\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.fyb.de\/en\/#website\",\"url\":\"https:\/\/www.fyb.de\/en\/\",\"name\":\"FYB Financial Yearbook\",\"description\":\"For Your Business\",\"publisher\":{\"@id\":\"https:\/\/www.fyb.de\/en\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.fyb.de\/en\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.fyb.de\/en\/#organization\",\"name\":\"FYB Financial Yearbook\",\"url\":\"https:\/\/www.fyb.de\/en\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.fyb.de\/en\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.fyb.de\/wp-content\/uploads\/2020\/06\/logo.svg\",\"contentUrl\":\"https:\/\/www.fyb.de\/wp-content\/uploads\/2020\/06\/logo.svg\",\"caption\":\"FYB Financial Yearbook\"},\"image\":{\"@id\":\"https:\/\/www.fyb.de\/en\/#\/schema\/logo\/image\/\"}}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"On the taxation of management shareholdings for advisory boards and consultants - FYB Financial Yearbook","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.fyb.de\/en\/produkt\/on-taxation-of-management-investments-for-advisory-counselors\/","og_locale":"en_US","og_type":"article","og_title":"On the taxation of management shareholdings for advisory boards and consultants - FYB Financial Yearbook","og_description":"Management investments are part of almost every private equity investor's investment. However, consultants and advisory board members are often given the opportunity to participate on the same or similar terms as management. While there are already a number of court decisions on the taxation of salaried managers with such equity interests, this has not yet been the case for the taxation of advisory boards and consultants. The Tax Court of Baden-W\u00fcrttemberg has now decided a first case on June 26, 2017 (- 8 K 4018\/14). In principle, proceeds from management equity investments are subject to taxation as capital assets and thus to the reduced tax rate of the final withholding tax and, in the case of equity investments of 1% or more, to the so-called partial income procedure. Under certain conditions, however, taxation at the normal income tax rate is also possible if the proceeds are attributed to the manager's employment as income from employment. In comparison to taxation as income from capital assets, this is associated with an additional tax burden of approx. 20% (top income tax rate 45% versus final withholding tax of 25%). The question of whether, and if so under what conditions, advisory boards or consultants can also be investors in management shareholdings has not yet been clarified by case law. must reckon with the fact that their proceeds will be attributed to income from self-employed work as remuneration for activities in accordance with Section 18 of the German Income Tax Act (EStG). In the practice of tax audits, it is sometimes found that the tax authorities do not differentiate between managers and advisory boards in these cases.","og_url":"https:\/\/www.fyb.de\/en\/produkt\/on-taxation-of-management-investments-for-advisory-counselors\/","og_site_name":"FYB Financial Yearbook","og_image":[{"width":334,"height":298,"url":"https:\/\/www.fyb.de\/wp-content\/uploads\/2018\/11\/koch-schulte.png","type":"image\/png"}],"twitter_card":"summary_large_image","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.fyb.de\/en\/produkt\/on-taxation-of-management-investments-for-advisory-counselors\/","url":"https:\/\/www.fyb.de\/en\/produkt\/on-taxation-of-management-investments-for-advisory-counselors\/","name":"On the taxation of management shareholdings for advisory boards and consultants - FYB Financial Yearbook","isPartOf":{"@id":"https:\/\/www.fyb.de\/en\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.fyb.de\/en\/produkt\/on-taxation-of-management-investments-for-advisory-counselors\/#primaryimage"},"image":{"@id":"https:\/\/www.fyb.de\/en\/produkt\/on-taxation-of-management-investments-for-advisory-counselors\/#primaryimage"},"thumbnailUrl":"https:\/\/www.fyb.de\/wp-content\/uploads\/2018\/11\/koch-schulte.png","datePublished":"2018-11-26T09:20:35+00:00","breadcrumb":{"@id":"https:\/\/www.fyb.de\/en\/produkt\/on-taxation-of-management-investments-for-advisory-counselors\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.fyb.de\/en\/produkt\/on-taxation-of-management-investments-for-advisory-counselors\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.fyb.de\/en\/produkt\/on-taxation-of-management-investments-for-advisory-counselors\/#primaryimage","url":"https:\/\/www.fyb.de\/wp-content\/uploads\/2018\/11\/koch-schulte.png","contentUrl":"https:\/\/www.fyb.de\/wp-content\/uploads\/2018\/11\/koch-schulte.png","width":334,"height":298},{"@type":"BreadcrumbList","@id":"https:\/\/www.fyb.de\/en\/produkt\/on-taxation-of-management-investments-for-advisory-counselors\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.fyb.de\/en\/"},{"@type":"ListItem","position":2,"name":"FYB Shop","item":"https:\/\/www.fyb.de\/en\/shop\/"},{"@type":"ListItem","position":3,"name":"On the taxation of management shareholdings for advisory boards and consultants"}]},{"@type":"WebSite","@id":"https:\/\/www.fyb.de\/en\/#website","url":"https:\/\/www.fyb.de\/en\/","name":"FYB Financial Yearbook","description":"For Your Business","publisher":{"@id":"https:\/\/www.fyb.de\/en\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.fyb.de\/en\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.fyb.de\/en\/#organization","name":"FYB Financial Yearbook","url":"https:\/\/www.fyb.de\/en\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.fyb.de\/en\/#\/schema\/logo\/image\/","url":"https:\/\/www.fyb.de\/wp-content\/uploads\/2020\/06\/logo.svg","contentUrl":"https:\/\/www.fyb.de\/wp-content\/uploads\/2020\/06\/logo.svg","caption":"FYB Financial Yearbook"},"image":{"@id":"https:\/\/www.fyb.de\/en\/#\/schema\/logo\/image\/"}}]}},"_links":{"self":[{"href":"https:\/\/www.fyb.de\/en\/wp-json\/wp\/v2\/product\/43846","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fyb.de\/en\/wp-json\/wp\/v2\/product"}],"about":[{"href":"https:\/\/www.fyb.de\/en\/wp-json\/wp\/v2\/types\/product"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fyb.de\/en\/wp-json\/wp\/v2\/comments?post=43846"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fyb.de\/en\/wp-json\/wp\/v2\/media\/23862"}],"wp:attachment":[{"href":"https:\/\/www.fyb.de\/en\/wp-json\/wp\/v2\/media?parent=43846"}],"wp:term":[{"taxonomy":"product_brand","embeddable":true,"href":"https:\/\/www.fyb.de\/en\/wp-json\/wp\/v2\/product_brand?post=43846"},{"taxonomy":"product_cat","embeddable":true,"href":"https:\/\/www.fyb.de\/en\/wp-json\/wp\/v2\/product_cat?post=43846"},{"taxonomy":"product_tag","embeddable":true,"href":"https:\/\/www.fyb.de\/en\/wp-json\/wp\/v2\/product_tag?post=43846"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}