{"id":5607,"date":"2021-03-30T07:20:00","date_gmt":"2021-03-30T05:20:00","guid":{"rendered":"https:\/\/honert.de\/?p=5607"},"modified":"2021-03-30T07:20:06","modified_gmt":"2021-03-30T05:20:06","slug":"tax-relief-for-employee-participation-programs-in-startups","status":"publish","type":"post","link":"https:\/\/honert.de\/en\/tax-relief-for-employee-participation-programs-in-startups\/","title":{"rendered":"TAX RELIEF FOR EMPLOYEE PARTICIPATION PROGRAMS IN STARTUPS"},"content":{"rendered":"\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-fbisuc-f5af495ce7e3a64a501f046c35bca416\">\n.avia-section.av-fbisuc-f5af495ce7e3a64a501f046c35bca416{\nbackground-repeat:no-repeat;\nbackground-image:url(https:\/\/honert.de\/wp-content\/uploads\/3629.jpg);\nbackground-position:0% 0%;\nbackground-attachment:scroll;\n}\n<\/style>\n<div id='av_section_1'  class='avia-section av-fbisuc-f5af495ce7e3a64a501f046c35bca416 main_color avia-section-default avia-no-shadow  avia-builder-el-0  el_before_av_section  avia-builder-el-first  hide_on_print avia-full-stretch avia-bg-style-scroll av-minimum-height av-minimum-height-40 av-height-40  container_wrap sidebar_right'  data-section-bg-repeat='stretch' data-av_minimum_height_pc='40' data-av_min_height_opt='40'><div class='container av-section-cont-open' ><main  role=\"main\" itemprop=\"mainContentOfPage\"  class='template-page content  av-content-small alpha units'><div class='post-entry post-entry-type-page post-entry-5607'><div class='entry-content-wrapper clearfix'>\n<\/div><\/div><\/main><!-- close content main element --><\/div><\/div><div id='av_section_2'  class='avia-section av-dqk1ok-64871ef2db336302e1b97b148ca966f8 main_color avia-section-default avia-no-shadow  avia-builder-el-1  el_after_av_section  avia-builder-el-last  avia-bg-style-scroll container_wrap sidebar_right'  ><div class='container av-section-cont-open' ><div class='template-page content  av-content-small alpha units'><div class='post-entry post-entry-type-page post-entry-5607'><div class='entry-content-wrapper clearfix'>\n\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-crqtxw-6f6eb2d8582e0b9f759c4a416524f235\">\n.flex_column.av-crqtxw-6f6eb2d8582e0b9f759c4a416524f235{\nborder-radius:0px 0px 0px 0px;\npadding:0px 0px 0px 0px;\n}\n<\/style>\n<div  class='flex_column av-crqtxw-6f6eb2d8582e0b9f759c4a416524f235 av_two_third  avia-builder-el-2  el_before_av_two_third  avia-builder-el-first  first flex_column_div av-zero-column-padding  '     ><style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-kmu8d4g1-28a39260f567b1b3978a66f1bb5588ec\">\n#top .av-special-heading.av-kmu8d4g1-28a39260f567b1b3978a66f1bb5588ec{\npadding-bottom:10px;\n}\nbody .av-special-heading.av-kmu8d4g1-28a39260f567b1b3978a66f1bb5588ec .av-special-heading-tag .heading-char{\nfont-size:25px;\n}\n.av-special-heading.av-kmu8d4g1-28a39260f567b1b3978a66f1bb5588ec .av-subheading{\nfont-size:15px;\n}\n<\/style>\n<div  class='av-special-heading av-kmu8d4g1-28a39260f567b1b3978a66f1bb5588ec av-special-heading-h1 blockquote modern-quote  avia-builder-el-3  avia-builder-el-no-sibling '><div class='av-subheading av-subheading_above'>30. March 2021\n<\/div><h1 class='av-special-heading-tag '  itemprop=\"headline\"  >TAX RELIEF FOR EMPLOYEE PARTICIPATION PROGRAMS IN STARTUPS<\/h1><div class=\"special-heading-border\"><div class=\"special-heading-inner-border\"><\/div><\/div><\/div><\/div>\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-b2rm5w-de02cfe70d765b3b1a9457f4b48802fd\">\n.flex_column.av-b2rm5w-de02cfe70d765b3b1a9457f4b48802fd{\nborder-radius:0px 0px 0px 0px;\npadding:0px 0px 0px 0px;\n}\n<\/style>\n<div  class='flex_column av-b2rm5w-de02cfe70d765b3b1a9457f4b48802fd av_two_third  avia-builder-el-4  el_after_av_two_third  el_before_av_two_third  first flex_column_div av-zero-column-padding  column-top-margin'     ><section  class='av_textblock_section av-kmu8dl61-27c64f7f1df7890611d9b8aebc8093cb '   itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock'  itemprop=\"text\" ><p><strong>On 20 January 2021, the German government passed a draft legislation to strengthen Germany as a fund location and to implement Directive (EU) 2019\/1160 amending Directives 2009\/65\/EC and 2011\/61\/EU with regard to the cross-border marketing of collective investment schemes (German Fund Location Act (<em>Fondsstandortgesetz<\/em>) &#8211; FoG), which also provides for tax relief for employee participation programs in startups.<\/strong><!--more--><\/p>\n<\/div><\/section><\/div>\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-9km8p0-94a75294b8f946bb7899e8f10fc5fcb4\">\n.flex_column.av-9km8p0-94a75294b8f946bb7899e8f10fc5fcb4{\nborder-radius:0px 0px 0px 0px;\npadding:0px 0px 0px 0px;\n}\n<\/style>\n<div  class='flex_column av-9km8p0-94a75294b8f946bb7899e8f10fc5fcb4 av_two_third  avia-builder-el-6  el_after_av_two_third  el_before_av_one_third  first flex_column_div av-zero-column-padding  column-top-margin'     ><section  class='av_textblock_section av-kmu8ggf1-ffb90a2d9f7da45e72b295faf57ef6e1 '   itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock'  itemprop=\"text\" ><h2>I. Promotion of the company pension scheme<\/h2>\n<p>The Fund Location Act is intended to make the granting of employee participation programs more attractive from a tax point of view. Sec. 19a planned for the German Income Tax Act (<em>Einkommensteuergesetz <\/em>&#8211; EStG) regulates deferred taxation of an employee participation in start-up companies if this is granted from 1 July 2021 onwards. The deferred taxation avoids that the mere promise of an employee participation already triggers taxes although the employee has not yet received any liquid funds (so-called <em>dry income tax<\/em>).<br \/>\nFor years, there have been calls from various directions for greater employee participation in the company&#8217;s success. One of the motives for this is to promote company pension schemes, as lower payments from statutory pension insurance and other instruments of old-age provision (life insurance, etc.) are expected for demographic reasons and due to the low-interest phase that has persisted since the financial crisis.<\/p>\n<h2>II. Startup and SME<\/h2>\n<p>The legislator defines the beneficiary startup company within the framework of the classification of so-called SMEs (small and medium-sized enterprises) and an age limit for the company of no more than 10 years. This definition of SMEs allows a maximum balance sheet total of \u20ac 43 million, a maximum turnover of \u20ac 50 million and less than 250 employees. A further prerequisite is that the employee participation is granted in addition to the salary that is owed anyway, which thus generally rules out conversion of remuneration. <\/p>\n<h2>III. Deferred taxation<\/h2>\n<p>The planned so-called deferred taxation can only be carried out in the course of the wage tax deduction procedure with the consent of the employee; a self-declaration by the employee in the assessment procedure is excluded.<br \/>\nThe actual taxation of the employee participation granted only takes place if<\/p>\n<ul>\n<li>the participation is transferred for a consideration or free of charge or is included in a business asset or<\/li>\n<li>the employment relationship with the granting employer ends or<\/li>\n<li>at the latest after the expiry of 10 years since the foundation of the company.<\/li>\n<\/ul>\n<p>This does not completely rule out the possibility of a so-called dry income tax, but merely postpones it.<br \/>\nWhen determining the non-cash benefit of the employee participation, the tax-free allowance pursuant to sec. 3 no. 39 EStG, which was raised from \u20ac 360 to \u20ac 720 p.a. under the Fund Location Act, may be deducted under the conditions specified therein. If the value of the employee participation has decreased at the time of taxation, the reduced value is used to determine the non-cash benefit.<br \/>\nThe non-cash benefit is taxed as wage at the standard tax rate. However, the rate reduction for extraordinary income pursuant to sec. 34 para. 1 EStG (so-called quintuple regulation (<em>F\u00fcnftelregelung<\/em>)) is applicable under the conditions stated therein if at least 3 years have passed since the employee participation program was granted.<\/p>\n<h2>IV. No extension to social security<\/h2>\n<p>Unfortunately, deferred taxation is probably not to be implemented for social security purposes as well, i.e. the granting of employee participation is &#8211; without any deferral &#8211; immediately subject to the obligation to pay contributions. However, this immediate obligation to pay contributions is mitigated by the contribution assessment ceiling in the individual branches of social insurance.<\/p>\n<\/div><\/section><\/div>\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-7is290-38a32f987762e7121e430b80ea61915b\">\n.flex_column.av-7is290-38a32f987762e7121e430b80ea61915b{\nborder-radius:0px 0px 0px 0px;\npadding:7px 0px 0px 0px;\n}\n<\/style>\n<div  class='flex_column av-7is290-38a32f987762e7121e430b80ea61915b av_one_third  avia-builder-el-8  el_after_av_two_third  avia-builder-el-last  sy-only-desktop hide_on_print flex_column_div  column-top-margin'     ><p><div  class='avia-builder-widget-area clearfix  avia-builder-el-9  el_before_av_textblock  avia-builder-el-first '><section id=\"categories-3\" class=\"widget clearfix widget_categories\"><h3 class=\"widgettitle\">Newsletter issues<\/h3>\n\t\t\t<ul>\n\t\t\t\t\t<li class=\"cat-item cat-item-272\"><a 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href=\"https:\/\/honert.de\/en\/category\/2017-q4-en\/\">2017 Q4<\/a>\n<\/li>\n\t<li class=\"cat-item cat-item-116\"><a href=\"https:\/\/honert.de\/en\/category\/2017-q3-en\/\">2017 Q3<\/a>\n<\/li>\n\t<li class=\"cat-item cat-item-114\"><a href=\"https:\/\/honert.de\/en\/category\/2017-q2-en\/\">2017 Q2<\/a>\n<\/li>\n\t<li class=\"cat-item cat-item-142\"><a href=\"https:\/\/honert.de\/en\/category\/deals-en\/\">Deal Announcements<\/a>\n<\/li>\n\t<li class=\"cat-item cat-item-58\"><a href=\"https:\/\/honert.de\/en\/category\/uncategorized\/\">Uncategorized<\/a>\n<\/li>\n\t\t\t<\/ul>\n\n\t\t\t<span class=\"seperator extralight-border\"><\/span><\/section><\/div><br \/>\n<section  class='av_textblock_section av-kmu8h64v-08d1405e61d9a0cbd616d28d3e5941d7 '   itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock'  itemprop=\"text\" ><h2>More information on this topic<\/h2>\n<ul class=\"sy-list-margin\">\n<li><a href=\"https:\/\/honert.de\/en\/taetigkeitsgebiete\/corporate-commercial-litigation\/\">Corporate \/ Commercial Litigation<\/a><\/li>\n<\/ul>\n<\/div><\/section><br \/>\n\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-40ais4-7907f1270f9747ee82a7813530418ff1\">\n#top .hr.hr-invisible.av-40ais4-7907f1270f9747ee82a7813530418ff1{\nheight:8px;\n}\n<\/style>\n<div  class='hr av-40ais4-7907f1270f9747ee82a7813530418ff1 hr-invisible  avia-builder-el-11  el_after_av_textblock  el_before_av_textblock '><span class='hr-inner '><span class=\"hr-inner-style\"><\/span><\/span><\/div><br \/>\n<section  class='av_textblock_section av-2msjjo-9fb9d093c089af6a8d17267b5948dfd2 '   itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock hide_on_print'  itemprop=\"text\" ><h2>Downloads<\/h2>\n<p><a href=\"#\" onclick=\"window.print();return false\">Print<\/a><br \/>\n\n\n\n\t<div class=\"dkpdf-button-container\" style=\" text-align:left \">\n\n\t\t<a class=\"dkpdf-button\" href=\"\/en\/wp-json\/wp\/v2\/posts\/5607?pdf=5607\" target=\"_blank\"><span class=\"dkpdf-button-icon\"><i class=\"fa fa-file-pdf-o\"><\/i><\/span> Download (PDF)<\/a>\n\n\t<\/div>\n\n\n\n\n\n<\/p>\n<\/div><\/section><\/p><\/div><\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='after_section_2'  class='main_color av_default_container_wrap container_wrap sidebar_right'  ><div class='container av-section-cont-open' ><div class='template-page content  av-content-small alpha units'><div class='post-entry post-entry-type-page post-entry-5607'><div class='entry-content-wrapper clearfix'>\n","protected":false},"excerpt":{"rendered":"<p>On 20 January 2021, the German government passed a draft legislation to strengthen Germany as a fund location and to implement Directive (EU) 2019\/1160 amending Directives 2009\/65\/EC and 2011\/61\/EU with regard to the cross-border marketing of collective investment schemes (German Fund Location Act (Fondsstandortgesetz) &#8211; FoG), which also provides for tax relief for employee participation programs in startups.<\/p>\n","protected":false},"author":26,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"mc4wp_mailchimp_campaign":[],"footnotes":""},"categories":[169],"tags":[],"class_list":["post-5607","post","type-post","status-publish","format-standard","hentry","category-2021-q1-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/honert.de\/en\/wp-json\/wp\/v2\/posts\/5607","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/honert.de\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/honert.de\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/honert.de\/en\/wp-json\/wp\/v2\/users\/26"}],"replies":[{"embeddable":true,"href":"https:\/\/honert.de\/en\/wp-json\/wp\/v2\/comments?post=5607"}],"version-history":[{"count":8,"href":"https:\/\/honert.de\/en\/wp-json\/wp\/v2\/posts\/5607\/revisions"}],"predecessor-version":[{"id":5649,"href":"https:\/\/honert.de\/en\/wp-json\/wp\/v2\/posts\/5607\/revisions\/5649"}],"wp:attachment":[{"href":"https:\/\/honert.de\/en\/wp-json\/wp\/v2\/media?parent=5607"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/honert.de\/en\/wp-json\/wp\/v2\/categories?post=5607"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/honert.de\/en\/wp-json\/wp\/v2\/tags?post=5607"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}