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TAX & BUSINESS
Distribution fiction for shareholder settlement accounts
With the Budget Companion Act 2027–2028 the legislature introduced a new distribution fiction for shareholder settlement accounts. The new provision is to be applied for the first time to financial years ending in the calendar year 2027.
In the future, shareholders of a GmbH who are natural persons must settle all claims of the company shown on a settlement account no later than the balance‑sheet date. Alternatively, the claim can be converted into a third‑party loan claim.
Such a loan must comply with the principles for arrangements between close relatives. The prerequisites in particular are a written agreement, appropriate security, an arm‑length term, a reasonable interest rate and a credit assessment of the shareholder that disregards the shareholder’s participation in the company.
Distribution where no measures are taken
If, by the balance‑sheet date, neither the settlement‑account claim is settled nor it is converted into an arm‑length loan claim, the outstanding amount is subject to the distribution fiction and therefore to capital gains tax.
The amounts are deemed to have been distributed to the shareholder and to have accrued on the day following the balance‑sheet date. For capital gains tax purposes, the KESt return and the remittance of the capital gains tax must be carried out within one week.
De minimis threshold for qualified shareholders
For shareholders who directly or indirectly hold at least 10 % of the company, a de‑minimis threshold of EUR 50,000 applies for practical reasons. The background is that qualified holdings typically involve a higher number of transactions between shareholder and company. Only the amount exceeding this threshold is subject to the distribution fiction.
Conclusion
The new distribution fiction leads to a significant tightening of the tax treatment of shareholder settlement accounts. The reason for the amendment is the frequently observed lax handling of claims against shareholders in practice, which have often been used to finance private living expenses without timely repayment.
Small shareholders are particularly affected, as the regulation applies to them from the very first euro. Companies, shareholders and their advisers should therefore engage with the new requirements early – in any case before the relevant balance‑sheet date – and, if necessary, implement the required measures.
Such a loan must comply with the principles for arrangements between close relatives. The prerequisites in particular are a written agreement, appropriate security, an arm‑length term, a reasonable interest rate and a credit assessment of the shareholder that disregards the shareholder’s participation in the company.
Distribution where no measures are taken
If, by the balance‑sheet date, neither the settlement‑account claim is settled nor it is converted into an arm‑length loan claim, the outstanding amount is subject to the distribution fiction and therefore to capital gains tax.
The amounts are deemed to have been distributed to the shareholder and to have accrued on the day following the balance‑sheet date. For capital gains tax purposes, the KESt return and the remittance of the capital gains tax must be carried out within one week.
De minimis threshold for qualified shareholders
For shareholders who directly or indirectly hold at least 10 % of the company, a de‑minimis threshold of EUR 50,000 applies for practical reasons. The background is that qualified holdings typically involve a higher number of transactions between shareholder and company. Only the amount exceeding this threshold is subject to the distribution fiction.
Conclusion
The new distribution fiction leads to a significant tightening of the tax treatment of shareholder settlement accounts. The reason for the amendment is the frequently observed lax handling of claims against shareholders in practice, which have often been used to finance private living expenses without timely repayment.
Small shareholders are particularly affected, as the regulation applies to them from the very first euro. Companies, shareholders and their advisers should therefore engage with the new requirements early – in any case before the relevant balance‑sheet date – and, if necessary, implement the required measures.