{"id":12885,"date":"2023-12-27T23:41:14","date_gmt":"2023-12-27T21:41:14","guid":{"rendered":"https:\/\/suw-steuerberatung.de\/optimize-taxes-conversion-of-a-sole-proprietorship-into-a-gmbh\/"},"modified":"2023-12-28T00:09:13","modified_gmt":"2023-12-27T22:09:13","slug":"optimize-taxes-conversion-of-a-sole-proprietorship-into-a-gmbh","status":"publish","type":"post","link":"https:\/\/suw-steuerberatung.de\/en\/optimize-taxes-conversion-of-a-sole-proprietorship-into-a-gmbh\/","title":{"rendered":"Optimizing taxes: Conversion of a sole proprietorship into a GmbH"},"content":{"rendered":"

Optimizing taxes: Conversion of a sole proprietorship into a GmbH<\/h1>\n

To save on taxes, a sole proprietorship can be converted into a limited liability company (GmbH). This is possible for up to 8 months retroactively and tax-neutral. This article explains the advantages and disadvantages of a GmbH and the conversion of a sole proprietorship into a GmbH.<\/em><\/p>\n

\"Conversion<\/h2>\n

Background<\/strong><\/h2>\n

Entrepreneur A founded his sole proprietorship at the beginning of 2020. The company is more successful than expected. After just 2 years, it is already making an annual pre-tax profit of EUR 200,000. Euro.<\/p>\n

The EBT does not include the entrepreneur’s salary, as the company is a sole proprietorship.<\/p>\n

Entrepreneur A is single and his personal income tax rate is 42%. This means that the tax burden (income and trade tax) is EUR 84,000. Entrepreneur A would like to continue to grow his company, i.e. he would like to have as much liquidity available in the company as possible.<\/p>\n

Entrepreneur A receives a salary as managing director of EUR 80,000 gross per year. The trade tax rate in his city is 420.<\/p>\n

Entrepreneur A is considering the advantages and disadvantages of converting a sole proprietorship into a GmbH<\/strong>.<\/p>\n

Advantages and disadvantages of the GmbH<\/h2>\n

Tax advantages of the GmbH<\/h3>\n

The tax advantages of the GmbH clearly lie in the stable tax burden. Taxes on the GmbH’s income average between 30-32%. As a corporation, the GmbH is subject to the following income taxes:<\/p>\n