German Exit Tax in 2026: The Bill Can Come Before the Sale

The tax calculation can arrive before a buyer has paid

First establish the legal trigger. Only then calculate an amount.

You built a German GmbH. Your shares have value, but no sale proceeds are in your account. A departure can still make German tax law treat those shares as sold at fair market value. That is the central problem: value is not liquidity. Confuse the two and you fund a tax bill with money nobody has transferred to you.

Section 6 AStG applies to shares within Section 17 EStG. In principle, a direct or indirect holding of at least one percent at some point during the preceding five years is enough; even the owner of a small GmbH may qualify.

There is a further personal test: at least seven years of unlimited German tax liability within the preceding twelve years. The rule does not catch every business owner or every trip abroad.

Below one percent does not mean an automatic exemption. Shares received without consideration from a qualifying predecessor and certain shares originating in tax-privileged contributions can enter Section 17 EStG at a lower holding. For a gift or earlier reorganization, examine the acquisition chain and predecessor periods under Section 6(2) AStG.

Three triggers to keep separate

1. Unlimited German tax liability ends as a result of giving up a residence or habitual abode; if both grounds exist, unlimited liability must end altogether.
2. Shares are transferred without consideration to a person who is not subject to unlimited German tax liability.
3. Germany's right to tax a later share-sale gain is excluded or restricted; this can require assessment even without a classic move.

Deregistering an address alone proves neither the end of German tax residence nor residence in the new country. Homes, actual presence, treaty effects and share ownership belong in one fact file before the relevant date. A flight date is not a tax analysis.

“‘I have not sold anything’ does not put my mind at ease. I want to know whether a legal trigger applies and who funds the first payment before a buyer pays.”

First decide whether relocation is the right route:A founder's location decision

What becomes due: assessed tax, an installment or tied-up cash?

One large number hides three different decisions.

The first figure is taxable appreciation. Start with the shares' fair market value on the relevant date and their tax-relevant acquisition cost; a professional must examine valuation, prior taxation and individual adjustments. The difference does not produce one universal tax rate. Section 6 AStG connects to the taxation of Section 17 EStG, not to a standard departure-tax percentage.

The second figure is the assessed tax. Under current Section 6(4) AStG, it may on application be paid in seven equal annual installments, generally against security and without interest on those installments. The first is generally due within one month of assessment; subsequent installments fall due on July 31 in following years. This is no automatic indefinite deferral until a sale.

The third figure is the funding gap: first installment, collateral capacity, valuation and advisory cost, family reserve and potential acceleration. Outstanding installments may become due after missed payments, breaches of reporting duties, insolvency, sale or transfer.

Distributions and capital repayments can accelerate outstanding amounts insofar as their combined fair market value exceeds one quarter of the relevant share value. Those events require a cash timeline, not a footnote.

The plan needs two reporting deadlines: generally notify reportable Section 6(4) events within one month; confirm your current address and continued attribution of the shares by July 31 each year.

Missed duties may accelerate unpaid installments. The statute generally requires electronic transmission; the applicable practical route and exceptions should be checked with the tax office against current Finance Ministry forms.

The Bavarian industry association vbw described the gap between assessment and cash in a January 2025 position paper: tax may arise even when the owner lacks liquid funds to pay it. That is an advocacy position, not a legal opinion. The funding question remains: who pays the first installment, and what security will the tax office accept?

This may be the hardest part to admit: you can want the move and still be unable to fund it yet. Your business may be valuable. That value does not pay the first installment or provide security on its own. It does not make relocation the wrong choice. It means someone must fund the time between an assessment and cash you can actually use.

A return is a legal case, not a safety blanket

For a temporary absence, Section 6(3) AStG may cause the tax claim to lapse under conditions if unlimited German liability is generally restored within seven years; an application can extend the period by up to five years. In this specific return case, an application can even suspend collection of annual installments during the period granted.

If return conditions fail or the intention to return is abandoned, the unpaid balance can fall due within one month; interest under Section 234 AO can arise on a deferred amount that ultimately does not lapse. Sale, transfer, substantial distributions and restored German taxing rights belong in the review. This is no general permission to wait for a sale.

“If your plan depends on installments, collateral is part of the price. If it depends on returning, the return is part of the risk.”

Tax assessed, payment date and cash available belong in separate columns.

What changed in 2022—and why 2025 added another screen

Old advice often travels further than old law.

2022 · A new timetable for Section 6 AStG

The reform applies to new departure cases from 2022. The personal test is generally seven years of unlimited German tax liability within the past twelve. The former deferral logic, which differed by destination, was replaced for new cases by application-based payment in seven annual installments. Transitional rules govern older cases; a 2020 move cannot simply be fed into a 2026 calculator.

2025 · Certain fund interests entered the frame

From 2025, Section 19(3) InvStG can apply to privately held investment-fund interests. Among other requirements, the total taxable gain must be positive and the investor must have held at least one percent of issued interests in the past five years or have acquisition costs of at least €500,000 in that fund at the relevant date.

Privately held special investment fund units have a separate rule in Section 49(5) InvStG; the €500,000 threshold cannot be copied into it. The Finance Ministry updated its departure-tax reporting form at the end of 2025 to include these fund cases.

The return consequence is different for special investment fund interests too: Section 49(5) InvStG postpones recognition of the gain calculated under investment tax law, subject to its conditions, until an actual or equivalent later disposal. That is not a blanket cancellation like a regular qualifying Section 6 return. Classify the fund, departure event and subsequent sale separately.

2025/26 · Distributions and return deserve closer attention

The 2025 Minimum Tax Adjustment Act clarified for certain older departure cases that returning after substantial dividends or capital repayments does not simply extinguish the tax claim; the amended legacy rule applies to such events after August 16, 2023.

For new cases, Section 6(3) and (4) AStG already contain distribution rules. Anyone planning to take money out before leaving or to receive dividends after leaving needs a timeline for both the company and the owner.

Updated forms do not create a new general flat tax or mean every ETF investor is affected. They mean shareholdings, private fund positions, earlier conversions and the actual triggering date belong on the same inventory.

No GmbH? Start with a different tax screen

Business assets follow rules distinct from privately held GmbH shares.

Section 6 AStG does not cover a sole business as such. If Germany loses a taxing right over business assets, Section 4(1) EStG or, for an entire business, Section 16(3a) EStG may apply; Section 18(3) EStG covers professional practices. A personal move alone does not prove that loss of rights.

The payment route also differs: Sections 4g and 36(5) EStG each have distinct five-year mechanisms under their own conditions, not Section 6's seven instalments. Our asset-exit analysis covers assets, establishments and the loss of taxing rights in depth. Privately held fund interests belong in the Section 19/49 screen above. Only the right legal basis makes a screen figure useful.

Sole proprietorship, practice or KG?Test asset exit and business property

A KG does not automatically change ownership

Partner interests, GmbH shares and business assets need separate tests.

A limited-partner interest in a commercial KG is not automatically a privately held Section 17 corporate share. General-partner GmbH shares, a KG opting for corporate treatment under Section 1a KStG and GmbH shares retained by the founder need separate screens.

The first questions are who actually owns the shares and which taxing rights Germany retains. Forming a KG, making an accounting entry or appointing a new director does not settle them. A separate structuring analysis will test these cases one by one.

“A director can take over daily operations. They cannot organize your shareholding away.”

The proposed shortcuts need a countercheck

Renaming an asset does not rewrite its tax treatment.

Sale before departure, liquidation, conversion, gifts, holdings and an external director are often presented as shortcuts. Each changes a different fact: ownership, the taxable date, business value or actual management. A sale creates a real disposal; a gift to someone without unlimited German tax liability may itself trigger Section 6; a new director does not transfer privately held shares.

At this point the test is simple: what tax does the proposed step itself create, and when will cash arrive? Our structuring analysis examines the individual routes and countercases. German and destination-country specialist views are needed before a binding signature.

Director, KG, holding or sale as an alleged solution?Six structures under review

A legal form is a tool. It is not a waiver for value already created.

Selling a business and leaving: the sequence is a wealth decision

Signing, closing and tax departure are not interchangeable dates.

A founder negotiates the sale of a GmbH while the family plans to move. At this point, 'where is tax lower?' is no longer enough.

Examine ownership and share percentage, pre-deal fair value, contractual price components, actual payment, German tax departure, continuing German taxing rights and destination-country treatment. An earn-out or deferred purchase price can move the cash date without moving the relevant tax date.

A complete exit plan also organizes management, banking, contracts, family and evidence. Our Exit Planning dossier covers that sequence. This dossier first identifies the tax and liquidity item that can overturn the plan. If a sale contract or move is approaching, the sequence must be reviewed before a binding act.

A business sale and personal move are running in parallel?Explore the Exit Planning sequence

The political debate is loud. Your plan needs current law.

Reform proposals are a scenario, not a source of finance.

The Finance Ministry's expert commission on simpler business taxation proposed in 2024 that a reform should make tax arise only on an actual sale (translation of its German wording) or defer the claim until realization.

Stiftung Familienunternehmen und Politik advocated a return to the pre-2022 rules in a January 2026 version of its lobby-register entry that has since been revised. These are documented reform positions, not current deferral rights or a government timetable.

There is a real countervailing aim: Section 6 AStG protects German taxation of appreciation accumulated under German jurisdiction. Fund cases and return consequences were sharpened in law and administration in 2025. A motion by the AfD to abolish Section 6 altogether failed in December 2025. None of this proves that October 2026 will bring either a rollback or a further tightening.

What official figures show—and what they cannot show

Destatis counted about 1.25 million departures from Germany in 2025 and a migration balance of minus 97,000 German citizens. The migration statistics say neither how many entrepreneurs or self-employed people left nor what their business interests were worth. Turning those counts into an amount of 'capital flight' would invent a link the source does not establish.

A December 2024 government reply reported 108 recorded Section 6 cases for tax year 2021 under the old law, limited to assessments completed by the end of 2023. That reply had no case statistics for 2022 onward and no business-size breakdown.

It reported about €686.8 million of assessed tax for 2019, about €675.4 million of it deferred; assessed tax for 2020 was about €84.2 million. These old, volatile assessment figures are neither cash tax revenue nor capital taken abroad and must not be presented as a present trend.

My position: is departure tax Germany's last fiscal bastion before a later sale outside its reach—or does it tie down founders whose value is not yet liquid? That is a political question. For your case, the funding date is in current law while reform remains uncertain.

Why avoid waiting for years? Not because of a manufactured tax panic. Because company value, family choices, buyers and succession windows move. Higher value can mean a larger starting point under unchanged rules; a later sale can require a different sequence. Early valuation and a documented comparison keep routes open. Waiting for an election slogan lets the next tax date choose for you.

“A reform may come. Your sale agreement already has a date.”

Before departure you need a decision, not a pocket calculator

The calculator opens the conversation. Ownership, value, time and cash decide it.

An orientation calculator should illustrate only the ordinary Section 6 path for privately held corporate shares. A holding percentage, acquisition cost, supported value range and date do not produce an assessment.

Show rough appreciation, a tax based on explicit assumptions and potential initial cash need separately; security and sale or distribution events remain unquantified risks.

Funds, opting partnerships, special partnership assets, Sections 4g/36 EStG and legacy cases do not belong in the same figure. Below one percent, Section 17 exceptions mean the tool must not give a definitive negative result. Unknown facts matter more than a screen figure precise to the euro.

The Decision Office turns these unknowns into an auditable sequence. We put staying, building a genuine foreign function without moving personally, and actually relocating against the same business and family case.

German tax advisers or specialist lawyers assess domestic triggers, valuation and the transaction. Qualified destination-country professionals assess taxation and residence there. NBF combines opinions, payment dates, alternatives and stop thresholds into a decision.

Staying may be the right interim decision. Building a real foreign operation without moving personally may work. Relocation may be possible once the first payment, security and sale date fit together. A restructuring or a pause may also emerge from specialist review. The point is to choose the route using your actual numbers before an assessment or contract dictates the sequence.

For specialist tax advisers and lawyers: You own the professional tax and legal assessment. NBF can bring the owner's objective, operating facts, destination country and funding into one decision case. If your client needs that coordination, we can assess a collaboration with defined roles. The professional engagement remains with the appointed advisers.

“I have no interest in how cheap a country looks on a slide. I want to know whether you can carry the transition before the buyer pays—and what your family needs until then.”

The most dangerous tax figure is the one without a payment date.