{"id":44264,"date":"2017-08-01T04:14:36","date_gmt":"2017-08-01T02:14:36","guid":{"rendered":"https:\/\/newserver.fyb.de\/produkt\/shareholder-loan-simple-form-of-financing-with-pitfalls\/"},"modified":"2017-08-01T04:14:36","modified_gmt":"2017-08-01T02:14:36","slug":"shareholder-loan-simple-financing-form-with-pieces","status":"publish","type":"product","link":"https:\/\/www.fyb.de\/en\/produkt\/shareholder-loan-simple-financing-form-with-pieces\/","title":{"rendered":"Shareholder loan \u2014 simple form of financing with pitfalls"},"content":{"rendered":"<p><strong>Prof. Dr. Andreas Nelle<\/strong> \u2014 Lawyer and Part\u00adner RAUE LLP, Berlin<\/p>\n<p><strong>Dr. J\u00f6rg Jaecks<\/strong> \u2014 Attor\u00adney at Law and Part\u00adner RAUE LLP, Berlin<\/p>\n","protected":false},"excerpt":{"rendered":"<p><strong>Share\u00adhol\u00adder loans are an extre\u00admely common form of finan\u00adcing, the pitfalls of which become parti\u00adcu\u00adlarly appa\u00adrent when not ever\u00ady\u00adthing goes accor\u00adding to plan and loan repay\u00adment is in ques\u00adtion. Then the crisis-exacer\u00adba\u00adting effects of this form of finan\u00adcing become appa\u00adrent. Many a share\u00adhol\u00adder wonders how diffi\u00adcult it can be to dispose of this easily and quickly cons\u00adtruc\u00adted form of finan\u00adcing without leaving any resi\u00addue. Share\u00adhol\u00adder loans can also become a stumb\u00adling block in the event of a sale of the company.<\/strong><\/p>\n<p>When finan\u00adcing a corpo\u00adra\u00adtion with its own funds, the share\u00adhol\u00adders have to decide whether to increase the subscri\u00adbed (share or nomi\u00adnal) capi\u00adtal, make an addi\u00adtio\u00adnal payment to the free reserve or provide the new funds in the form of a share\u00adhol\u00adder loan. Share\u00adhol\u00adder loans may, under certain circum\u00ads\u00adtances, be econo\u00admic\u00adally more advan\u00adta\u00adge\u00adous for the share\u00adhol\u00adders than the injec\u00adtion of (real) equity. Instead of profit distri\u00adbu\u00adti\u00adons subject to income tax, which are gene\u00adrally subject to the 25% with\u00adhol\u00adding tax rate, the share\u00adhol\u00adders receive inte\u00adrest payments from the Company. These are also subject to income tax. Unlike profit distri\u00adbu\u00adti\u00adons, howe\u00adver, inte\u00adrest payments at the level of the Company are gene\u00adrally tax deductible.<\/p>\n<p><strong>Legal frame\u00adwork<\/strong><\/p>\n<ul>\n<li>Tax deduc\u00adti\u00adbi\u00adlity: inte\u00adrest barrier at company level<\/li>\n<\/ul>\n<p>At the level of the Company, inte\u00adrest payments from the loan obli\u00adga\u00adtion lead to a reduc\u00adtion in profit. Since 2008, howe\u00adver, tax deduc\u00adti\u00adbi\u00adlity in this area has only been permis\u00adsi\u00adble within the frame\u00adwork of the so-called inte\u00adrest barrier (cf. Sec. 4h (1) Sentence 1 EStG, Sec. 8a (1) KStG). Accor\u00addin\u00adgly, net inte\u00adrest expen\u00adses (i.e. inte\u00adrest expen\u00adses excee\u00adding inte\u00adrest income of the Company) of less than EUR 3 million p.a. are deduc\u00adti\u00adble, while net inte\u00adrest expen\u00adses excee\u00adding this amount are only imme\u00addia\u00adtely deduc\u00adti\u00adble to the extent of 30% of the tax EBITDA (earnings before inte\u00adrest, taxes, depre\u00adcia\u00adtion and amor\u00adtiza\u00adtion). If EBITDA falls, this has the effect of exacer\u00adba\u00adting the crisis by redu\u00adcing the deduc\u00adtion poten\u00adtial for borro\u00adwing&nbsp;costs.<\/p>\n<p>In the context of trade tax, in addi\u00adtion to the regu\u00adla\u00adtion on the inte\u00adrest barrier, the special addi\u00adtion rule for finan\u00adcing fees must also be taken into account, accor\u00adding to which inte\u00adrest expen\u00adses are gene\u00adrally only 75% deduc\u00adti\u00adble as opera\u00adting expen\u00adses if the total finan\u00adcing fees paid by the company for the year exceed EUR 100,000 (Section 8 No. 1 GewStG).<\/p>\n","protected":false},"featured_media":41303,"comment_status":"open","ping_status":"closed","template":"","meta":{"wp_typography_post_enhancements_disabled":false},"product_brand":[],"product_cat":[2452,2604,2606,2621],"product_tag":[1650,2142,2151,2164,2173,2179],"class_list":{"0":"post-44264","1":"product","2":"type-product","3":"status-publish","4":"has-post-thumbnail","6":"product_cat-ebook-en","7":"product_cat-fyb-2013-en","8":"product_cat-prof-dr-andreas-nelle-en","9":"product_cat-dr-joerg-jaecks-en","10":"product_tag-shareholder-loan","11":"product_tag-nelle-en","12":"product_tag-andreas-en","13":"product_tag-joerg-en","14":"product_tag-jaecks-en","15":"product_tag-interest-barrier","16":"pa_sprache-english-3","17":"pa_sprache-german","19":"first","20":"outofstock","21":"taxable","22":"shipping-taxable","23":"purchasable","24":"product-type-variable"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Shareholder loan - simple form of financing with pitfalls - 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\/shareholder-loan-simple-financing-form-with-pieces\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Shareholder loan - simple form of financing with pitfalls - FYB Financial Yearbook\" \/>\n<meta property=\"og:description\" content=\"Shareholder loans are an extremely common form of financing, the pitfalls of which become particularly apparent when not everything goes according to plan and loan repayment is in question. Then the crisis-exacerbating effects of this form of financing become apparent. Many a shareholder wonders how difficult it can be to dispose of this easily and quickly constructed form of financing without leaving any residue. Shareholder loans can also become a stumbling block in the event of a sale of the company. When financing a corporation with its own funds, the shareholders have to decide whether to increase the subscribed (share or nominal) capital, make an additional payment to the free reserve or provide the new funds in the form of a shareholder loan. Shareholder loans may, under certain circumstances, be economically more advantageous for the shareholders than the injection of (real) equity. Instead of profit distributions subject to income tax, which are generally subject to the 25% withholding tax rate, the shareholders receive interest payments from the Company. These are also subject to income tax. Unlike profit distributions, however, interest payments at the level of the Company are generally tax deductible. Legal framework  Tax deductibility: interest barrier at company level At the level of the Company, interest payments from the loan obligation lead to a reduction in profit. Since 2008, however, tax deductibility in this area has only been permissible within the framework of the so-called interest barrier (cf. Sec. 4h (1) Sentence 1 EStG, Sec. 8a (1) KStG). Accordingly, net interest expenses (i.e. interest expenses exceeding interest income of the Company) of less than EUR 3 million p.a. are deductible, while net interest expenses exceeding this amount are only immediately deductible to the extent of 30% of the tax EBITDA (earnings before interest, taxes, depreciation and amortization). If EBITDA falls, this has the effect of exacerbating the crisis by reducing the deduction potential for borrowing costs. In the context of trade tax, in addition to the regulation on the interest barrier, the special addition rule for financing fees must also be taken into account, according to which interest expenses are generally only 75% deductible as operating expenses if the total financing fees paid by the company for the year exceed EUR 100,000 (Section 8 No. 1 GewStG).\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.fyb.de\/en\/produkt\/shareholder-loan-simple-financing-form-with-pieces\/\" \/>\n<meta property=\"og:site_name\" content=\"FYB Financial Yearbook\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.fyb.de\/wp-content\/uploads\/2017\/08\/Nelle.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\/shareholder-loan-simple-financing-form-with-pieces\/\",\"url\":\"https:\/\/www.fyb.de\/en\/produkt\/shareholder-loan-simple-financing-form-with-pieces\/\",\"name\":\"Shareholder loan - simple form of financing with pitfalls - FYB Financial Yearbook\",\"isPartOf\":{\"@id\":\"https:\/\/www.fyb.de\/en\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.fyb.de\/en\/produkt\/shareholder-loan-simple-financing-form-with-pieces\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.fyb.de\/en\/produkt\/shareholder-loan-simple-financing-form-with-pieces\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.fyb.de\/wp-content\/uploads\/2017\/08\/Nelle.png\",\"datePublished\":\"2017-08-01T02:14:36+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/www.fyb.de\/en\/produkt\/shareholder-loan-simple-financing-form-with-pieces\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.fyb.de\/en\/produkt\/shareholder-loan-simple-financing-form-with-pieces\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.fyb.de\/en\/produkt\/shareholder-loan-simple-financing-form-with-pieces\/#primaryimage\",\"url\":\"https:\/\/www.fyb.de\/wp-content\/uploads\/2017\/08\/Nelle.png\",\"contentUrl\":\"https:\/\/www.fyb.de\/wp-content\/uploads\/2017\/08\/Nelle.png\",\"width\":334,\"height\":298},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.fyb.de\/en\/produkt\/shareholder-loan-simple-financing-form-with-pieces\/#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\":\"Shareholder loan \u2014 simple form of financing with pitfalls\"}]},{\"@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":"Shareholder loan - simple form of financing with pitfalls - 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\/shareholder-loan-simple-financing-form-with-pieces\/","og_locale":"en_US","og_type":"article","og_title":"Shareholder loan - simple form of financing with pitfalls - FYB Financial Yearbook","og_description":"Shareholder loans are an extremely common form of financing, the pitfalls of which become particularly apparent when not everything goes according to plan and loan repayment is in question. Then the crisis-exacerbating effects of this form of financing become apparent. Many a shareholder wonders how difficult it can be to dispose of this easily and quickly constructed form of financing without leaving any residue. Shareholder loans can also become a stumbling block in the event of a sale of the company. When financing a corporation with its own funds, the shareholders have to decide whether to increase the subscribed (share or nominal) capital, make an additional payment to the free reserve or provide the new funds in the form of a shareholder loan. Shareholder loans may, under certain circumstances, be economically more advantageous for the shareholders than the injection of (real) equity. Instead of profit distributions subject to income tax, which are generally subject to the 25% withholding tax rate, the shareholders receive interest payments from the Company. These are also subject to income tax. Unlike profit distributions, however, interest payments at the level of the Company are generally tax deductible. Legal framework  Tax deductibility: interest barrier at company level At the level of the Company, interest payments from the loan obligation lead to a reduction in profit. Since 2008, however, tax deductibility in this area has only been permissible within the framework of the so-called interest barrier (cf. Sec. 4h (1) Sentence 1 EStG, Sec. 8a (1) KStG). Accordingly, net interest expenses (i.e. interest expenses exceeding interest income of the Company) of less than EUR 3 million p.a. are deductible, while net interest expenses exceeding this amount are only immediately deductible to the extent of 30% of the tax EBITDA (earnings before interest, taxes, depreciation and amortization). If EBITDA falls, this has the effect of exacerbating the crisis by reducing the deduction potential for borrowing costs. In the context of trade tax, in addition to the regulation on the interest barrier, the special addition rule for financing fees must also be taken into account, according to which interest expenses are generally only 75% deductible as operating expenses if the total financing fees paid by the company for the year exceed EUR 100,000 (Section 8 No. 1 GewStG).","og_url":"https:\/\/www.fyb.de\/en\/produkt\/shareholder-loan-simple-financing-form-with-pieces\/","og_site_name":"FYB Financial Yearbook","og_image":[{"width":334,"height":298,"url":"https:\/\/www.fyb.de\/wp-content\/uploads\/2017\/08\/Nelle.png","type":"image\/png"}],"twitter_card":"summary_large_image","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.fyb.de\/en\/produkt\/shareholder-loan-simple-financing-form-with-pieces\/","url":"https:\/\/www.fyb.de\/en\/produkt\/shareholder-loan-simple-financing-form-with-pieces\/","name":"Shareholder loan - simple form of financing with pitfalls - FYB Financial Yearbook","isPartOf":{"@id":"https:\/\/www.fyb.de\/en\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.fyb.de\/en\/produkt\/shareholder-loan-simple-financing-form-with-pieces\/#primaryimage"},"image":{"@id":"https:\/\/www.fyb.de\/en\/produkt\/shareholder-loan-simple-financing-form-with-pieces\/#primaryimage"},"thumbnailUrl":"https:\/\/www.fyb.de\/wp-content\/uploads\/2017\/08\/Nelle.png","datePublished":"2017-08-01T02:14:36+00:00","breadcrumb":{"@id":"https:\/\/www.fyb.de\/en\/produkt\/shareholder-loan-simple-financing-form-with-pieces\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.fyb.de\/en\/produkt\/shareholder-loan-simple-financing-form-with-pieces\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.fyb.de\/en\/produkt\/shareholder-loan-simple-financing-form-with-pieces\/#primaryimage","url":"https:\/\/www.fyb.de\/wp-content\/uploads\/2017\/08\/Nelle.png","contentUrl":"https:\/\/www.fyb.de\/wp-content\/uploads\/2017\/08\/Nelle.png","width":334,"height":298},{"@type":"BreadcrumbList","@id":"https:\/\/www.fyb.de\/en\/produkt\/shareholder-loan-simple-financing-form-with-pieces\/#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":"Shareholder loan \u2014 simple form of financing with pitfalls"}]},{"@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\/44264","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=44264"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fyb.de\/en\/wp-json\/wp\/v2\/media\/41303"}],"wp:attachment":[{"href":"https:\/\/www.fyb.de\/en\/wp-json\/wp\/v2\/media?parent=44264"}],"wp:term":[{"taxonomy":"product_brand","embeddable":true,"href":"https:\/\/www.fyb.de\/en\/wp-json\/wp\/v2\/product_brand?post=44264"},{"taxonomy":"product_cat","embeddable":true,"href":"https:\/\/www.fyb.de\/en\/wp-json\/wp\/v2\/product_cat?post=44264"},{"taxonomy":"product_tag","embeddable":true,"href":"https:\/\/www.fyb.de\/en\/wp-json\/wp\/v2\/product_tag?post=44264"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}