Ok, but what is the definition of "moving out"? You could get a US visa and just live there. Moving your business out? You could open a US LTD company transfer your assets and shut your GMBH what's the big deal?
I dont see how you couldn't structure this with an offshore licensing deal. Ie Irish company picks up 99% of billing, German company sends Irish company license fees etc and reduce profit of German company to zero for three years.
IANAL, but it seems it also applies to foreign companies. Who owns the irish company? Also tax authorities tend to look very carefully at these transfer pricing arrangements as you are also potentially dodging the corporate tax rate.
Oli (Oliver? Not sure which you prefer, which I realize now I should have asked a long time ago in our first call) -
Just wanted to reiterate that I really appreciate what you have done with both OpenRegulatory and Formwork, as it was a big unlock for one of the companies I helped a few years ago as we navigated our way into the QMS / FDA / med. reg. world.
While reading this as a many-times-over-founder myself, I deeply felt multiple emotions which this would bring upon me if I were in your shoes after all the work I know you’ve put in.
I hope you are able to navigate this to a happy / successful outcome for yourself and any others involved for the relevant compan(y/ies)!
I am grateful for what you have contributed over the years on the software and documentation fronts with OpenRegulatory and Formwork both.
As USA is the main destination for IPO, wouldn't many German companies naturally leave?
Also once you are successful you can afford to pay the costs to arrange the companies affairs in a tax efficient manner e.g. utilise low tax regions with the EU such as Luxembourg and wider world.
> And then your exit tax is calculated by taking the average of the past 3 years of earnings of that company, multiplied by 13.75 (which is crazy), and then taking 60% of that which is taxed at your personal income tax rate (likely 42%; Teileinkünfteverfahren)
This does not match the results from 5 minutes of googling, not for individuals at least. What is being taxed is the shares you're holding, as if you're selling them, which results in a tax on their increase in value compared to when you've bought them. [disclaimer: I just did a quick search on this, I'm not a tax consultant or lawyer.]
I haven't looked for the regulations on companies moving their headquarters away from Germany. It's possible those rules are the above, and the author confused them with the rules for individuals.
Either way, if the author believes they're right, they should dig up some citations. There are none in that article. Is this based on advice they've received? Did they do their own research? Are they a tax consultant or lawyer? 13.75 is a very "spottable" number, how about a link to the law that has that number?
- First off, your assumption is wrong that only the increase in value gets taxed. No, the entire value of your holding gets taxed, see § 6 Abs. 1 Satz 1 Außensteuergesetz (AStG) [1].
- The factor 13.75 originates from the calculation method called "vereinfachtes Ertragswertverfahren" (~ simplified earnings-based method), which itself is defined in Bewertungsgesetz (BewG), § 11 Wertpapiere und Anteile [2]
- Factor 13.75 is defined in Bewertungsgesetz (BewG), § 203 Kapitalisierungsfaktor [3]
- The tax rate of 42% is the marginal tax rate in Germany (at least below €250k income, beyond that it's 45%) - so the assumption here is that, in the year in which you leave Germany, you've already had some salary income (say, €90k) which bumps you into the marginal tax rate for any additional income on top of that.
> - First off, your assumption is wrong that only the increase in value gets taxed. No, the entire value of your holding gets taxed, see § 6 Abs. 1 Satz 1 Außensteuergesetz (AStG) [1].
You're misreading that law. It says moving away is equivalent to selling shares and that §17 EStG is applicable. Which in turn says:
(2) Veräußerungsgewinn im Sinne des Absatzes 1 ist der Betrag, um den der Veräußerungspreis nach Abzug der Veräußerungskosten die Anschaffungskosten übersteigt.
> - The factor 13.75 originates from the calculation method called "vereinfachtes Ertragswertverfahren" (~ simplified earnings-based method), which itself is defined in Bewertungsgesetz (BewG), § 11 Wertpapiere und Anteile [2]
§199 BewG says "…kann das vereinfachte Ertragswertverfahren (§ 200) angewendet werden, wenn dieses nicht zu offensichtlich unzutreffenden Ergebnissen führt."
Key phrase there being "kann". It doesn't have to. You can probably sue against it getting applied, if they're really insisting on it. And note §11 BewG says:
"…so ist er unter Berücksichtigung der Ertragsaussichten der Kapitalgesellschaft oder einer anderen anerkannten, auch im gewöhnlichen Geschäftsverkehr für nichtsteuerliche Zwecke üblichen Methode zu ermitteln; dabei ist die Methode anzuwenden, die ein Erwerber der Bemessung des Kaufpreises zu Grunde legen würde…"
So, finding a reasonable method that a buyer would use to determine the values of the shares is explicitly pointed out.
1. Yeah, valid - I was assuming the default case of "you founded your company in Germany and are moving away at some stage". In that case, you could deduct the initial share capital (often €25k) from the valuation, as that was your "purchase price". In most cases, that doesn't lead to a significantly different outcome.
But yeah, if you actually bought shares of an existing company at a certain (higher) price, than of course the "taxable delta" might change your calculation.
In that respect, I was wrong as I assumed everything would get taxed. This is only roughly the case when you founded the company yourself in Germany, as mentioned above. Thanks for the correction!
2. True! As mentioned in my post, you can also pay someone to assess the value of your shares, which would most likely result in a valuation lower than 13.75x. You will have the additional costs of getting that assessment though, and you'll have to convince the authorities that your assessment is closer to the truth than the default valuation which is based on 13.75x.
They basically treat you as if you sold your shares or company when leaving the country. If you run a one man company that is currently making a good profit, this can become really expensive.
> You could, of course, sell or wind down your company, which would solve all problems outlined here. But this is not an option for most entrepreneurs.
For a software business, you could presumably:
- Incorporate a company in your country of choice
- Transfer subscribers from German company to new foreign company (depending on payments provider, this can be a massive effort, for example, not a simple form field in Stripe).
- If new company incorporated in a country you want to live in, use it to obtain an investor Visa
- German company now has 0 in revenue, wind it down and leave.
Better do it properly. Western countries have tax departments that can make your life a living hell if you do it wrong. If you have enough resources to be subject to an exit tax, I highly recommend paying for proper tax advice.
This is fraud and you'll end up in jail. Your company is not "you". You are a shareholder but as a CEO, you should do what's best for the "company" and what you described is criminal activity to bankrupt the company.
> German company now has 0 in revenue, wind it down and leave.
You forgot about employees. If German employment law is anything like the Dutch one, then it means you can't wind down the company while you have employees. They may refuse to leave. Firing them may be subject to government approval, who may also refuse.
It's not dumb. You're not allowed to close a business in the US until you check a lot of boxes, too. You have to show you don't have outstanding debts and so on. The banks won't let you do that because it's an easy way to escape debt. That's exactly why bankruptcy is an extended legal process.
If an employee is guaranteed X months salary upon notice of layoff in the contract, that's debt you have to resolve before you legally close. If you have a 5 year lease agreement for the property, that's also debt you have to resolve. It's exactly the same idea.
a quick check says it isn't. you only have to consider the notice period which depends on how long people have been working there. which means you can't wind down in a hurry but there is no right to refuse to leave nor any refusal from government.
I wasn't joking at all when I previously said in [0], moves like this is how to lose and now this is another reason why tech founders do not start companies in Europe and when a company gets too big, especially in Germany.
Just don't be surprised to see a decline in tax revenue when countries like Germany chase the wealth creators out of the country with high taxes + exit taxes.
Something I've noticed with German business law is that it is very much structured in such a way that if you aren't an incumbent player, you are essentially incentivized to be absorbed by them.
In the US we do have issues with businesses, but it's not like the Bosch, Thyssen, or Tschira family are any less unethical.
The level of hierarchy I've noticed in German firms and founders is insane to say the least. I'd love to do some quantitative research into this, but I haven't been in academia or policy for years now.
Yup, this is possible. It would have to be at some fair market value, and you'd (obviously) have to tax that in Germany. And depending on how much you trust your buddy, you might or might not have to draft up some complicated legal framework that you indeed have the right to buy back your company at some stage :)
Berlin wall of tax? Seriously? Nobody gets shot trying to cross the border here and it's clear that the ones who can afford a decent financial advisory will get around most of the regulations anyways.
I don't see how this business economist whining belongs on hn.
The developed world is increasingly facing a funding crisis brought on by this propaganda that if we tax corporations and the very wealthy then they'll leave.
One of the most farcical examples of this is the decades-long race to the bottom on business taxes and incentives between Kansas City, Missouri and Kansas City, Kansas. For the non-Americans out there, this is basically one city but it sits at the border of two states. So the two states are constantly torching money to lure businesses that play this system and simply go back and forth.
I believe this situation will come to an end and there are several reasons for this:
1. For the EU in particular, reliance on US tech giants is increasingly becoming a security issue. The Eu will increasingly wants homegrown alternatives so the option of leaving will simply not exist because you could leave but then you lose the EU as a customer;
2. For a long time multinational companies used transfer pricing to avoid paying taxes. What's transfer pricing? Let's say you buy a sofa in China for @200, ship it to the US for another $200 and then sell it for $1000. You've made a gross profit of $600. What if instead you have a subsidiary in Vanuatu, which has no corporate income tax (AFAIK), and it buys the sofas for $400 and sell them to the US company for $950? Well, you've booked $550 in profit where there's no tax and only $50 profit where there is.
That's technically illegal. It's often-called transfer pricing manipulation.
So what do tech giants like Google do? They sell their IP to an Irish subsidiary. There's a nominal process to make sure this is done for a "fair" value (according to the IRS). Then they pay royalties to their own Irish subsidiary to shift profits to a lower tax regime. Previously, this created a problem because they couldn't repatriate the money without paying (then) 30%+ corporate taxes but this all changed in 2017 with a tax holiday and a change to how this kind of income was treated. The net result was way lower than 30% net tax however, even with Biden's 15% minimum tax (which was a good thing) that came later.
What's the difference between this kind of profit-shifting with IP and transfer pricing manipulation? Absolutely nothing, except one is illegal and one isn't.
3. Revenue will increasigly have to be taxed in the source country. For example, Google I believe books all UK ad contracts through Ireland such that the UK subsidiary has essentially zero income to tax. I believe governments will increasingly crack down on this such that if something is sold in the UK, it's taxed by the UK; and
4. While individuals may be able to notionally "leave", assets generally can't. Land can't be moved overseas. Natural resources that are mined or fished or logged can't be moved overseas. So it's really an empty threat.
I'm really sick of this "the businesses will leave" propaganda.
>3. Revenue will increasigly have to be taxed in the source country. For example, Google I believe books all UK ad contracts through Ireland such that the UK subsidiary has essentially zero income to tax. I believe governments will increasingly crack down on this such that if something is sold in the UK, it's taxed by the UK;
Wasn’t this only a thing while the UK was in the EU, because the EU expressly allowed it?
- A printer (the most important equipment of any German startup founder)
- Envelopes for letters
- A stamp with your company name (some companies and agencies you deal with require you to stamp things, because a stamp obviously proves, beyond any doubt, that you are acting on behalf of your company, because obviously no one would be able to create a similar stamp with your company's name on it, right)
- A virtual office address at a coworking space (because you're receiving physical mail, and also there are weird tax reasons not to register your company at your home address)
- A mail-scanning service (because you don't want to walk to the coworking space every few days to pick up your physical mail)
- A mail-forwarding service (so that the mail gets forwarded from your virtual office address, which now has exactly no purpose at all, to your mail-scanning service)
Pretty much all political parties loudly announce that they'll reduce bureaucracy, but, judging by the outcomes, not much has happened so far.
That being said, it's probably overly simplistic to blame political parties for this - there's a lot of e.g. county/state-level bureaucracy in Germany which gets in the way of making any sort of constructive changes. It's a bit like blaming the CEO of a bloated company for not making it "agile" in a short period of time. Sure, leadership is important, but the reality is, it's.. complicated.
I would think it's a joke but once literally had an office clerk in Germany scratching with fingernail my signature to check whether it's by pen and in the right color.
They do tax on residency rather than citizenship. If you are a structured embezzler in another country, than expect the CRA auditors after 184 days in Canada.
Also, Canadian laws don't stop at the border as a citizen... so breaking laws in other places still puts you in legal peril for extradition.
Notably, corporate tax rates are often much lower in Canada, and export free trade is available with most trading partners. Note the US taxes on citizenship regardless of where you live (or if you hold multiple citizenship), and failure to file your IRS statement was an $8k fine last I heard. The fine often stays even if you owe the IRS $0, and temporarily live in another region.
The TLDR version: talk with corporate tax accountants in each region before filing, and do not assume the late tax filing fines will magically not apply to your situation. AMCHAM will usually help guide investors on their filing obligations for type C corporations in the US. =3
That is nuts, I always assumed that would fall under the capital gains taxes in the investors T5 filing at the end of the year. (could be dramatically lower rate if you get stuck with cash at the end of the year)
Now I know why the brand trademarks are usually held by an independent entity, and licensed to a domestic number company.
I guess that is why we pay the corporate accountants. lol =3
This comment breaches the guidelines and is not conducive to the kind of discussion we're trying to cultivate on HN. It's an important and difficult topic, and thus care needs to be taken to avoid getting activated, then commenting in ways that activate charged reactions in those who see things differently, as this is what takes threads into flamewar hell.
Please take a moment to read the guidelines and make an effort to observe them in future, particularly these ones:
Be kind. Don't be snarky. Converse curiously; don't cross-examine. Edit out swipes.
Comments should get more thoughtful and substantive, not less, as a topic gets more divisive.
Please don't fulminate. Please don't sneer, including at the rest of the community.
Eschew flamebait. Avoid generic tangents. Omit internet tropes.
Please don't use Hacker News for political or ideological battle. It tramples curiosity.
While rather sarcastic, your comment does hit an interesting point: How much does the infrastructure and society of any given state contribute to the "building" of a company?
I'd argue that, for software companies, not very much; at least if you contrast it with a hardware company. If you're, say, forging steel, you're using roads, trains, a lot of electricity, you've got an industrial plant, worker unions, public accident insurance, etc., etc. - a significant chunk of state-associated infrastructure is a part of your business, and was a part of your business when you built it.
But for software companies? I mean, you need a stable internet connection, good mobile phone coverage (tricky in Germany sometimes), rule of law, efficient bureaucracy (e.g. when hiring people), good banks which don't lose your money, electricity, etc. - none of these "infrastructure factors" feel as big as the ones for a hardware business.
On the contrary, for a software business, one could argue that Germany is actively hostile to you: Founding a company takes weeks / months and is expensive (notary), most processes are still paper-based, hiring people (especially internationally) is a huge pain, mobile internet is spotty, residential internet has outages. Charging customer credit cards via Stripe exposes you to a rabbit hole of VAT bureaucracy - all companies I've met so far rolled their own, broken software stack to somehow match up their Stripe + VAT charges with their internal bookkeeping software (e.g. Datev). A huge mess. It doesn't end there.
> You need peace, law enforcement, trust in others to lower stress and increase creativity, good teachers and education.
This is a great point.
The flip side is that if a government fails to deliver those, they have failed their side of the social contract. Then ideally, the citizens they've failed should be able to opt out..
What about a software company founded in Germany by someone who grew up in another country, and accordingly got their education elsewhere?
What if that company is a remote company which hires people all over the world, and none of those people benefited from the {education|peace|law enforcement|trust} in Germany?
I do agree with you, in principle, that a company is somewhat coupled to the country it was founded in. The exact nature of that coupling, however, is not that simple, I would say.
> I'd argue that, for software companies, not very much
If you build any successful business, including a software business, in a lawless and corrupt country you will have local mafias try to extort you for money the moment they hear about it. In especially corrupt countries, corrupt cops/prosecutors etc will be in on it so there will be nothing to protect you. Blackouts will be common due to a poor power grid. Likewise, internet access will be unreliable, slow and expensive due to poor infrastructure.
A country like Germany is absolute godsend compared to, say, Nigeria or Cambodia.
While minimal infrastructure investments would need to be made to entice software companies, their is a political price to pay by allowing young business people into your country who likely will out-earn the average resident (many historical examples of this). This makes the majority of people unhappy, but brings in educated-non-criminal customers and tax dollars. Lets say Germany does (1) great, they attract 1000 smart europeans to found companies, and 10 years later 1 of those companies becomes a megacorp.
2. Keep software companies happy
10 years has passed, new politicians are in charge. Pursuing #1 is a separate strategy to #2. I would hope i live in a country that wants to (1) attract young talent and (2) keep talent happy, but of course thats not necessarily true. The new politicians in charge need to appease the majority of people again as its election season!
I think Germany / USA can't really have an honest conversation about this as Germany + USA already have highly progressive tax systems. A significant % of USA and Germany residents don't pay any reasonable amount of tax, and are drains on the tax system. I assume these %s are likely projected to grow in the future rather than decline.
If the price of bread happens to rise? Then our politicians and voters will support squeezing more tax out of productive sects of society for the short term gains. Then those productive and mobile members of society will slowly move elsewhere.
"If you comply here, you will be compliant in almost all EU countries or even around the world" situation, many qualified students, international talent pool due to attractive cities, quality of life, startup grants/funding, hotspot for B2B fairs...
Presumably you paid for that infrastructure in the form of taxes while you did business in the country. Why, then, should the state have additional claims on the money you made? Were the taxes they collected already not enough?
That's not what the exit tax is, though. The German exit tax is effectively just a way to give the existing capital gains tax a way to tax unrealized gains when you leave the country, to prevent you from dodging taxes on capital gains by simply leaving the country.
In other words, it's not an additional claim. It's simply an enforcement mechanism for the money you already hypothetically owe.
Yes, that's true, but the implementation is.. not very elegant.
In theory, the exit tax should ensure that Germany gets the taxes of the sale of your company. So, if you ever sold your company once you're no longer in Germany, Germany wouldn't get those taxes, so it charges you immediately once you leave Germany in a sort-of "virtual" sale.
This, of course, sucks tremendously because you actually haven't sold your company, and "normal" people don't have this sort of cash on hand.
Other countries have "smarter" exit tax implementations and only charge you when you actually sell your company in the future. I think that's pretty fair. It also doesn't hinder people from leaving the country.
Another reasonable implementation would be for the government to accept payment in the form of shares of your company. Personally I think this is how all taxation of illiquid assets should be done, but I suppose it could get complicated.
In Germany only 40+% of your income goes to taxes and social security. Plus another meager ~20% on most things you buy. Plus a small tax on many things that are supposedly bad for you, like ~70% on cigarettes. Death is taxed at a discount, only 15-40% depending on how rich you were.
This take is wildly out of sync with the reality that the U.S., as one of the few developed nations without free healthcare, pays more for their healthcare than all of them while having worse than average outcomes.
The worst healthcare is in reality American healthcare. We pay through the nose for the privilege of getting terrible results.
Switzerland has almost the same system as the US, and it works - when my wife needed an MRI, she got referred at around 11am by a specialist, for a call around 1pm to see if she's available that afternoon. She wasn't so they agreed on the next day.
I received a CAT scan a couple years ago, about 4 hours after I wandered into urgent care. Before they stuffed me through the toroid, I asked the operator to set the dials to 1988 so I could advise my former self to buy MSFT with everything I had.
The bill was quite a whopper, though Obamacare paid most of it. Of course, my Obamacare premiums are about 4x what they were before Obamacare.
Of course. And historically, US health care costs rose at about the rate of inflation until the late 1960s, where the curve tilted strongly upwards at a much higher rate, and continues today.
What happened in the late 1960s? The advent of "free" healthcare!
The idea that a company is "siphoning out" value is fundamentally flawed. The company is creating value, and society enables it.
This enablement is ongoing, and should be paid for with ongoing tax.
If the actual value creator decides that they can get a better deal somewhere else, then barriers to exit come in because the government is trying to get more out of a company than it provided. (Since if there are superior places to operate, the worth of what the state you are leaving provides must be overvalued, otherwise you wouldn't leave).
I think most people would be okay with an exit tax if it's reasonable. Requiring the owner of a business generating €20k in profit to then pay €70k in taxes is not reasonable.
Canada also has an unreasonable exit tax. Canadian founders are taxed on 50% of the FMV of their shares on departure. So if you own half of a company that is worth $50m, your taxable income for the year of departure is increased by $12.5m.
Agreed. As mentioned in another comment, I think it'd be fair to levy the exit tax when you actually sell your company in the future. Like, if I ever sell my business, I'd be happy to pay my fair share of German taxes on said business, even if I'd no longer be a tax resident of Germany.
The current implementation which essentially simulates a "virtual" sale of your business once you leave the country is pretty terrible, as most normal humans don't have that sort of cash on hand because, well, they actually didn't sell their business at that point in time.
Perhaps you would apply the same logic to a family car, or the clothing you bought? Should they tax the value of your medical degree when you leave the country?
Exit taxes are generally applied as if the taxpayer sold all capital assets on the day of leaving.
At least in the US taxation regime (I'm unfamiliar with others), family cars don't qualify for a capital loss, and rarely appreciate. Clothing would be similar.
But it doesn't seem unreasonable that a country should want to be paid tax on unrealized gains as you're leaving. It would probably be more fair to wait until the gains were realized and then apportion the gains among the countries of residence, but if you're leaving, it's going to be hard to compel your participation later, so it makes more sense to do it as you're leaving.
In the article it shows that very rich owners can evade the tax (probably they've already planned and left!), while middle class people the tax wipes out their business and probably send them bankrupt. It's more like handcuffs than socialism.
I am sure they could achieve the same goals of fair tax but learn some game theory before doing so.
yep, there’s a reason these people start their businesses in stable economied countries, yet certain groups of them do everything to pretend they owe nothing back.
i’d love to see a comprehensive study on how much corporate tax avoidance costs a country vs food stamps so we can get an accurate view on who leeches/gains more. my suspicion is corporate wage theft/tax avoidance/evasion/subsidies are significantly higher, particularly if we add in executives and major stock holders.
This comment is in breach of several guidelines. I understand these are important topics and it's fine to raise these points, but HN can only be a good place for discussing difficult topics like these if people make the effort to avoid inflammatory rhetoric.
Please take a moment to read the guidelines and make an effort to observe them in future, particularly these ones:
Be kind. Don't be snarky. Converse curiously; don't cross-examine. Edit out swipes.
Comments should get more thoughtful and substantive, not less, as a topic gets more divisive.
When disagreeing, please reply to the argument instead of calling names. "That is idiotic; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3."
Please don't fulminate. Please don't sneer, including at the rest of the community.
Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith.
Eschew flamebait. Avoid generic tangents. Omit internet tropes.
Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something.
Please don't use Hacker News for political or ideological battle. It tramples curiosity.
> The purpose of this rule is to tax the increase in value of these shares that came about in Germany but has not yet been realised before they are able to escape the reach of German taxes by the move abroad.
Doesn't sound all that crazy to me.
Also, the proposed analogy to the Berlin wall feels quite pathetic for those that have actually lived behind it.
Ok, but what is the definition of "moving out"? You could get a US visa and just live there. Moving your business out? You could open a US LTD company transfer your assets and shut your GMBH what's the big deal?
I dont see how you couldn't structure this with an offshore licensing deal. Ie Irish company picks up 99% of billing, German company sends Irish company license fees etc and reduce profit of German company to zero for three years.
IANAL, but it seems it also applies to foreign companies. Who owns the irish company? Also tax authorities tend to look very carefully at these transfer pricing arrangements as you are also potentially dodging the corporate tax rate.
Oli (Oliver? Not sure which you prefer, which I realize now I should have asked a long time ago in our first call) -
Just wanted to reiterate that I really appreciate what you have done with both OpenRegulatory and Formwork, as it was a big unlock for one of the companies I helped a few years ago as we navigated our way into the QMS / FDA / med. reg. world.
While reading this as a many-times-over-founder myself, I deeply felt multiple emotions which this would bring upon me if I were in your shoes after all the work I know you’ve put in.
I hope you are able to navigate this to a happy / successful outcome for yourself and any others involved for the relevant compan(y/ies)!
I am grateful for what you have contributed over the years on the software and documentation fronts with OpenRegulatory and Formwork both.
I find this website to be a much clearer resource on the issue: https://www.winheller.com/en/tax-law-tax-advisory/internatio...
True! The purpose of my post was more to zoom in on the very specific case of people with small businesses, and not explain exit tax in general.
I wrote up another post with more generic notes on the exit tax [1] which might be a better post to compare to your link.
The minor benefit of my post is that I don't have an incentive to sell you expensive tax advice, chuckle..
[1] https://eidel.io/notes-and-hacks-on-germanys-exit-tax/
When businesses are fleeing, you're doing something very wrong.
Not necessarily.
As USA is the main destination for IPO, wouldn't many German companies naturally leave?
Also once you are successful you can afford to pay the costs to arrange the companies affairs in a tax efficient manner e.g. utilise low tax regions with the EU such as Luxembourg and wider world.
> As USA is the main destination for IPO
Why do you think that might be? Perhaps the Germans could make their IPOs more business friendly, so they have no reason to flee.
> And then your exit tax is calculated by taking the average of the past 3 years of earnings of that company, multiplied by 13.75 (which is crazy), and then taking 60% of that which is taxed at your personal income tax rate (likely 42%; Teileinkünfteverfahren)
This does not match the results from 5 minutes of googling, not for individuals at least. What is being taxed is the shares you're holding, as if you're selling them, which results in a tax on their increase in value compared to when you've bought them. [disclaimer: I just did a quick search on this, I'm not a tax consultant or lawyer.]
I haven't looked for the regulations on companies moving their headquarters away from Germany. It's possible those rules are the above, and the author confused them with the rules for individuals.
Either way, if the author believes they're right, they should dig up some citations. There are none in that article. Is this based on advice they've received? Did they do their own research? Are they a tax consultant or lawyer? 13.75 is a very "spottable" number, how about a link to the law that has that number?
Author here. Sure, here are the sources:
- First off, your assumption is wrong that only the increase in value gets taxed. No, the entire value of your holding gets taxed, see § 6 Abs. 1 Satz 1 Außensteuergesetz (AStG) [1].
- The factor 13.75 originates from the calculation method called "vereinfachtes Ertragswertverfahren" (~ simplified earnings-based method), which itself is defined in Bewertungsgesetz (BewG), § 11 Wertpapiere und Anteile [2]
- Factor 13.75 is defined in Bewertungsgesetz (BewG), § 203 Kapitalisierungsfaktor [3]
- The tax rate of 42% is the marginal tax rate in Germany (at least below €250k income, beyond that it's 45%) - so the assumption here is that, in the year in which you leave Germany, you've already had some salary income (say, €90k) which bumps you into the marginal tax rate for any additional income on top of that.
[1] https://www.gesetze-im-internet.de/astg/__6.html
[2] https://www.gesetze-im-internet.de/bewg/__11.html
[3] https://www.gesetze-im-internet.de/bewg/__203.html
> - First off, your assumption is wrong that only the increase in value gets taxed. No, the entire value of your holding gets taxed, see § 6 Abs. 1 Satz 1 Außensteuergesetz (AStG) [1].
You're misreading that law. It says moving away is equivalent to selling shares and that §17 EStG is applicable. Which in turn says:
(2) Veräußerungsgewinn im Sinne des Absatzes 1 ist der Betrag, um den der Veräußerungspreis nach Abzug der Veräußerungskosten die Anschaffungskosten übersteigt.
> - The factor 13.75 originates from the calculation method called "vereinfachtes Ertragswertverfahren" (~ simplified earnings-based method), which itself is defined in Bewertungsgesetz (BewG), § 11 Wertpapiere und Anteile [2]
§199 BewG says "…kann das vereinfachte Ertragswertverfahren (§ 200) angewendet werden, wenn dieses nicht zu offensichtlich unzutreffenden Ergebnissen führt."
Key phrase there being "kann". It doesn't have to. You can probably sue against it getting applied, if they're really insisting on it. And note §11 BewG says:
"…so ist er unter Berücksichtigung der Ertragsaussichten der Kapitalgesellschaft oder einer anderen anerkannten, auch im gewöhnlichen Geschäftsverkehr für nichtsteuerliche Zwecke üblichen Methode zu ermitteln; dabei ist die Methode anzuwenden, die ein Erwerber der Bemessung des Kaufpreises zu Grunde legen würde…"
So, finding a reasonable method that a buyer would use to determine the values of the shares is explicitly pointed out.
Good points!
1. Yeah, valid - I was assuming the default case of "you founded your company in Germany and are moving away at some stage". In that case, you could deduct the initial share capital (often €25k) from the valuation, as that was your "purchase price". In most cases, that doesn't lead to a significantly different outcome.
But yeah, if you actually bought shares of an existing company at a certain (higher) price, than of course the "taxable delta" might change your calculation.
In that respect, I was wrong as I assumed everything would get taxed. This is only roughly the case when you founded the company yourself in Germany, as mentioned above. Thanks for the correction!
2. True! As mentioned in my post, you can also pay someone to assess the value of your shares, which would most likely result in a valuation lower than 13.75x. You will have the additional costs of getting that assessment though, and you'll have to convince the authorities that your assessment is closer to the truth than the default valuation which is based on 13.75x.
While that number seems to be not a general value, the "Wegzugsbesteuerung" still is significant.
https://de.wikipedia.org/wiki/Wegzugsbesteuerung
Essentially, it assumes you sell your assets at market value and taxes the difference to your expenses for it.
That's what I was trying to say ("What is being taxed is the shares you're holding, as if you're selling them,") … did I word that poorly/confusingly?
They basically treat you as if you sold your shares or company when leaving the country. If you run a one man company that is currently making a good profit, this can become really expensive.
Exactly. And they, by default, use a very high multiple (13.75) for calculating the value of your shares.
There's a note at the end
> You could, of course, sell or wind down your company, which would solve all problems outlined here. But this is not an option for most entrepreneurs.
For a software business, you could presumably:
- Incorporate a company in your country of choice
- Transfer subscribers from German company to new foreign company (depending on payments provider, this can be a massive effort, for example, not a simple form field in Stripe).
- If new company incorporated in a country you want to live in, use it to obtain an investor Visa
- German company now has 0 in revenue, wind it down and leave.
Better do it properly. Western countries have tax departments that can make your life a living hell if you do it wrong. If you have enough resources to be subject to an exit tax, I highly recommend paying for proper tax advice.
It applies to any company you own, regardless of where the company is incorporated
This is fraud and you'll end up in jail. Your company is not "you". You are a shareholder but as a CEO, you should do what's best for the "company" and what you described is criminal activity to bankrupt the company.
> German company now has 0 in revenue, wind it down and leave.
You forgot about employees. If German employment law is anything like the Dutch one, then it means you can't wind down the company while you have employees. They may refuse to leave. Firing them may be subject to government approval, who may also refuse.
Dumb American here but that sounds like a few steps too far in employee protections. A business can't even die without government approval?
It's not dumb. You're not allowed to close a business in the US until you check a lot of boxes, too. You have to show you don't have outstanding debts and so on. The banks won't let you do that because it's an easy way to escape debt. That's exactly why bankruptcy is an extended legal process.
If an employee is guaranteed X months salary upon notice of layoff in the contract, that's debt you have to resolve before you legally close. If you have a 5 year lease agreement for the property, that's also debt you have to resolve. It's exactly the same idea.
a quick check says it isn't. you only have to consider the notice period which depends on how long people have been working there. which means you can't wind down in a hurry but there is no right to refuse to leave nor any refusal from government.
I wasn't joking at all when I previously said in [0], moves like this is how to lose and now this is another reason why tech founders do not start companies in Europe and when a company gets too big, especially in Germany.
Just don't be surprised to see a decline in tax revenue when countries like Germany chase the wealth creators out of the country with high taxes + exit taxes.
[0] https://news.ycombinator.com/item?id=44134832
Something I've noticed with German business law is that it is very much structured in such a way that if you aren't an incumbent player, you are essentially incentivized to be absorbed by them.
In the US we do have issues with businesses, but it's not like the Bosch, Thyssen, or Tschira family are any less unethical.
The level of hierarchy I've noticed in German firms and founders is insane to say the least. I'd love to do some quantitative research into this, but I haven't been in academia or policy for years now.
German here. I fully agree that German companies tend to be crazy hierarchical.
Does this apply to non-resident owners/founders (big shareholders that don't live in Germany) of German companies when they sell their shares?
Is there a look back period? What stops me from selling my business to my buddy the day I leave and then buying it back the day after?
The idea is that leaving the country is taxed as if you sold your shares.
So selling them presumably doesn't help.
Your taxes should work out the same (or worse). Exit tax is akin to you selling all your properties at the point of exit.
Yup, this is possible. It would have to be at some fair market value, and you'd (obviously) have to tax that in Germany. And depending on how much you trust your buddy, you might or might not have to draft up some complicated legal framework that you indeed have the right to buy back your company at some stage :)
Nothing. But you will have to pay taxes on the money you get from your buddy. If he is paying too little, you may get into additional trouble.
Berlin wall of tax? Seriously? Nobody gets shot trying to cross the border here and it's clear that the ones who can afford a decent financial advisory will get around most of the regulations anyways. I don't see how this business economist whining belongs on hn.
The developed world is increasingly facing a funding crisis brought on by this propaganda that if we tax corporations and the very wealthy then they'll leave.
One of the most farcical examples of this is the decades-long race to the bottom on business taxes and incentives between Kansas City, Missouri and Kansas City, Kansas. For the non-Americans out there, this is basically one city but it sits at the border of two states. So the two states are constantly torching money to lure businesses that play this system and simply go back and forth.
I believe this situation will come to an end and there are several reasons for this:
1. For the EU in particular, reliance on US tech giants is increasingly becoming a security issue. The Eu will increasingly wants homegrown alternatives so the option of leaving will simply not exist because you could leave but then you lose the EU as a customer;
2. For a long time multinational companies used transfer pricing to avoid paying taxes. What's transfer pricing? Let's say you buy a sofa in China for @200, ship it to the US for another $200 and then sell it for $1000. You've made a gross profit of $600. What if instead you have a subsidiary in Vanuatu, which has no corporate income tax (AFAIK), and it buys the sofas for $400 and sell them to the US company for $950? Well, you've booked $550 in profit where there's no tax and only $50 profit where there is.
That's technically illegal. It's often-called transfer pricing manipulation.
So what do tech giants like Google do? They sell their IP to an Irish subsidiary. There's a nominal process to make sure this is done for a "fair" value (according to the IRS). Then they pay royalties to their own Irish subsidiary to shift profits to a lower tax regime. Previously, this created a problem because they couldn't repatriate the money without paying (then) 30%+ corporate taxes but this all changed in 2017 with a tax holiday and a change to how this kind of income was treated. The net result was way lower than 30% net tax however, even with Biden's 15% minimum tax (which was a good thing) that came later.
What's the difference between this kind of profit-shifting with IP and transfer pricing manipulation? Absolutely nothing, except one is illegal and one isn't.
3. Revenue will increasigly have to be taxed in the source country. For example, Google I believe books all UK ad contracts through Ireland such that the UK subsidiary has essentially zero income to tax. I believe governments will increasingly crack down on this such that if something is sold in the UK, it's taxed by the UK; and
4. While individuals may be able to notionally "leave", assets generally can't. Land can't be moved overseas. Natural resources that are mined or fished or logged can't be moved overseas. So it's really an empty threat.
I'm really sick of this "the businesses will leave" propaganda.
>3. Revenue will increasigly have to be taxed in the source country. For example, Google I believe books all UK ad contracts through Ireland such that the UK subsidiary has essentially zero income to tax. I believe governments will increasingly crack down on this such that if something is sold in the UK, it's taxed by the UK;
Wasn’t this only a thing while the UK was in the EU, because the EU expressly allowed it?
also buy fax machine, dozen ring binders, and paper shredder before you start that business
Also:
- A printer (the most important equipment of any German startup founder)
- Envelopes for letters
- A stamp with your company name (some companies and agencies you deal with require you to stamp things, because a stamp obviously proves, beyond any doubt, that you are acting on behalf of your company, because obviously no one would be able to create a similar stamp with your company's name on it, right)
- A virtual office address at a coworking space (because you're receiving physical mail, and also there are weird tax reasons not to register your company at your home address)
- A mail-scanning service (because you don't want to walk to the coworking space every few days to pick up your physical mail)
- A mail-forwarding service (so that the mail gets forwarded from your virtual office address, which now has exactly no purpose at all, to your mail-scanning service)
for comparison in china stamps completely replace the signature. but then, digital signatures that are not cryptograpically signed are no better.
Given that this kind of thing seems to be widely reported, are there any significant efforts to reduce the friction all this causes?
Pretty much all political parties loudly announce that they'll reduce bureaucracy, but, judging by the outcomes, not much has happened so far.
That being said, it's probably overly simplistic to blame political parties for this - there's a lot of e.g. county/state-level bureaucracy in Germany which gets in the way of making any sort of constructive changes. It's a bit like blaming the CEO of a bloated company for not making it "agile" in a short period of time. Sure, leadership is important, but the reality is, it's.. complicated.
And the right color pen. God forbid you fill in an official form in the wrong color pen.
Can't use your rainbow colored pen in the states either...
I don't know why you need to mix that in here. It's irrelevant.
Looking at their older posts, many of which are greyed out, best strat is "FAMO" - flag and move on.
I would think it's a joke but once literally had an office clerk in Germany scratching with fingernail my signature to check whether it's by pen and in the right color.
Signatures that can be erased easily aren't a great fit for a legally binding document.
For more information, you can check whether the ink complies with DIN ISO 12757-2 and/or read up on "Dokumentenechtheit" [1]
[1] https://de.wikipedia.org/wiki/Dokumentenechtheit (It hasn't been translated to other languages yet.)
There's a reason why Kafka wrote his novels in German.
Because he was German Bohemian? (https://en.wikipedia.org/wiki/Sudeten_Germans#Austria-Hungar...)
no, because bureaucrazy in Germany is rampart.
He didn't live in Germany.
Germany waives its taxes to encourage small businesses, and when they grow, they go elsewhere.
It seems that capitalists should never be encouraged. They lack any sense of morality.
Canada also has an exit tax. For individuals as well as businesses.
They do tax on residency rather than citizenship. If you are a structured embezzler in another country, than expect the CRA auditors after 184 days in Canada.
Also, Canadian laws don't stop at the border as a citizen... so breaking laws in other places still puts you in legal peril for extradition.
Notably, corporate tax rates are often much lower in Canada, and export free trade is available with most trading partners. Note the US taxes on citizenship regardless of where you live (or if you hold multiple citizenship), and failure to file your IRS statement was an $8k fine last I heard. The fine often stays even if you owe the IRS $0, and temporarily live in another region.
The TLDR version: talk with corporate tax accountants in each region before filing, and do not assume the late tax filing fines will magically not apply to your situation. AMCHAM will usually help guide investors on their filing obligations for type C corporations in the US. =3
Departure tax for individuals:
https://www.canada.ca/en/revenue-agency/services/tax/interna...
Departure tax for corporations:
https://www.canada.ca/en/revenue-agency/services/tax/interna...
That is nuts, I always assumed that would fall under the capital gains taxes in the investors T5 filing at the end of the year. (could be dramatically lower rate if you get stuck with cash at the end of the year)
Now I know why the brand trademarks are usually held by an independent entity, and licensed to a domestic number company.
I guess that is why we pay the corporate accountants. lol =3
At least Canada steps us cost basis upon becoming resident AFAIU.
[flagged]
This comment breaches the guidelines and is not conducive to the kind of discussion we're trying to cultivate on HN. It's an important and difficult topic, and thus care needs to be taken to avoid getting activated, then commenting in ways that activate charged reactions in those who see things differently, as this is what takes threads into flamewar hell.
Please take a moment to read the guidelines and make an effort to observe them in future, particularly these ones:
Be kind. Don't be snarky. Converse curiously; don't cross-examine. Edit out swipes.
Comments should get more thoughtful and substantive, not less, as a topic gets more divisive.
Please don't fulminate. Please don't sneer, including at the rest of the community.
Eschew flamebait. Avoid generic tangents. Omit internet tropes.
Please don't use Hacker News for political or ideological battle. It tramples curiosity.
https://news.ycombinator.com/newsguidelines.html
While rather sarcastic, your comment does hit an interesting point: How much does the infrastructure and society of any given state contribute to the "building" of a company?
I'd argue that, for software companies, not very much; at least if you contrast it with a hardware company. If you're, say, forging steel, you're using roads, trains, a lot of electricity, you've got an industrial plant, worker unions, public accident insurance, etc., etc. - a significant chunk of state-associated infrastructure is a part of your business, and was a part of your business when you built it.
But for software companies? I mean, you need a stable internet connection, good mobile phone coverage (tricky in Germany sometimes), rule of law, efficient bureaucracy (e.g. when hiring people), good banks which don't lose your money, electricity, etc. - none of these "infrastructure factors" feel as big as the ones for a hardware business.
On the contrary, for a software business, one could argue that Germany is actively hostile to you: Founding a company takes weeks / months and is expensive (notary), most processes are still paper-based, hiring people (especially internationally) is a huge pain, mobile internet is spotty, residential internet has outages. Charging customer credit cards via Stripe exposes you to a rabbit hole of VAT bureaucracy - all companies I've met so far rolled their own, broken software stack to somehow match up their Stripe + VAT charges with their internal bookkeeping software (e.g. Datev). A huge mess. It doesn't end there.
But I may be wrong.
You need peace, law enforcement, trust in others to lower stress and increase creativity, good teachers and education.
Someone growing up in a society is strongly an outcome of that society.
> You need peace, law enforcement, trust in others to lower stress and increase creativity, good teachers and education.
This is a great point.
The flip side is that if a government fails to deliver those, they have failed their side of the social contract. Then ideally, the citizens they've failed should be able to opt out..
What about a software company founded in Germany by someone who grew up in another country, and accordingly got their education elsewhere?
What if that company is a remote company which hires people all over the world, and none of those people benefited from the {education|peace|law enforcement|trust} in Germany?
I do agree with you, in principle, that a company is somewhat coupled to the country it was founded in. The exact nature of that coupling, however, is not that simple, I would say.
Reality is complicated, I suppose :)
Lets drop you into the mid Cretaceous period and see how far your education takes you.
Without the contributions of millions of others on a daily basis you’d have nothing.
In business, you pay for those contributions.
Milton Friedman describes how a pencil is made with the self-coordinated efforts of millions of people around the globe: https://www.youtube.com/watch?v=67tHtpac5ws
For those unaware, the original essay "I, Pencil" was written by Leonard Read:
https://fee.org/ebooks/i-pencil/
> I'd argue that, for software companies, not very much
If you build any successful business, including a software business, in a lawless and corrupt country you will have local mafias try to extort you for money the moment they hear about it. In especially corrupt countries, corrupt cops/prosecutors etc will be in on it so there will be nothing to protect you. Blackouts will be common due to a poor power grid. Likewise, internet access will be unreliable, slow and expensive due to poor infrastructure.
A country like Germany is absolute godsend compared to, say, Nigeria or Cambodia.
> If you build any successful business … you will have local mafias try to extort you for money the moment they hear about it.
Precisely how is this different from mixed economies, like the US or Germany?
1. Attract software companies
While minimal infrastructure investments would need to be made to entice software companies, their is a political price to pay by allowing young business people into your country who likely will out-earn the average resident (many historical examples of this). This makes the majority of people unhappy, but brings in educated-non-criminal customers and tax dollars. Lets say Germany does (1) great, they attract 1000 smart europeans to found companies, and 10 years later 1 of those companies becomes a megacorp.
2. Keep software companies happy
10 years has passed, new politicians are in charge. Pursuing #1 is a separate strategy to #2. I would hope i live in a country that wants to (1) attract young talent and (2) keep talent happy, but of course thats not necessarily true. The new politicians in charge need to appease the majority of people again as its election season!
I think Germany / USA can't really have an honest conversation about this as Germany + USA already have highly progressive tax systems. A significant % of USA and Germany residents don't pay any reasonable amount of tax, and are drains on the tax system. I assume these %s are likely projected to grow in the future rather than decline.
If the price of bread happens to rise? Then our politicians and voters will support squeezing more tax out of productive sects of society for the short term gains. Then those productive and mobile members of society will slowly move elsewhere.
"If you comply here, you will be compliant in almost all EU countries or even around the world" situation, many qualified students, international talent pool due to attractive cities, quality of life, startup grants/funding, hotspot for B2B fairs...
It looks like education is cheap.
Presumably you paid for that infrastructure in the form of taxes while you did business in the country. Why, then, should the state have additional claims on the money you made? Were the taxes they collected already not enough?
That's not what the exit tax is, though. The German exit tax is effectively just a way to give the existing capital gains tax a way to tax unrealized gains when you leave the country, to prevent you from dodging taxes on capital gains by simply leaving the country.
In other words, it's not an additional claim. It's simply an enforcement mechanism for the money you already hypothetically owe.
Yes, that's true, but the implementation is.. not very elegant.
In theory, the exit tax should ensure that Germany gets the taxes of the sale of your company. So, if you ever sold your company once you're no longer in Germany, Germany wouldn't get those taxes, so it charges you immediately once you leave Germany in a sort-of "virtual" sale.
This, of course, sucks tremendously because you actually haven't sold your company, and "normal" people don't have this sort of cash on hand.
Other countries have "smarter" exit tax implementations and only charge you when you actually sell your company in the future. I think that's pretty fair. It also doesn't hinder people from leaving the country.
Another reasonable implementation would be for the government to accept payment in the form of shares of your company. Personally I think this is how all taxation of illiquid assets should be done, but I suppose it could get complicated.
Don’t you have to pay capital gains on sale to USA government even if you leave? I thought it was based on where the shares were assigned.
In Germany only 40+% of your income goes to taxes and social security. Plus another meager ~20% on most things you buy. Plus a small tax on many things that are supposedly bad for you, like ~70% on cigarettes. Death is taxed at a discount, only 15-40% depending on how rich you were.
"Free" healthcare though. It's a bargain!
"Free" healthcare always turns out to be the most expensive healthcare.
This take is wildly out of sync with the reality that the U.S., as one of the few developed nations without free healthcare, pays more for their healthcare than all of them while having worse than average outcomes.
The worst healthcare is in reality American healthcare. We pay through the nose for the privilege of getting terrible results.
Switzerland has almost the same system as the US, and it works - when my wife needed an MRI, she got referred at around 11am by a specialist, for a call around 1pm to see if she's available that afternoon. She wasn't so they agreed on the next day.
Is it expensive? Yes. Does it work? Absolutely.
I received a CAT scan a couple years ago, about 4 hours after I wandered into urgent care. Before they stuffed me through the toroid, I asked the operator to set the dials to 1988 so I could advise my former self to buy MSFT with everything I had.
The bill was quite a whopper, though Obamacare paid most of it. Of course, my Obamacare premiums are about 4x what they were before Obamacare.
I call BS on this statement. And German healthcare isn’t even free.
Of course. And historically, US health care costs rose at about the rate of inflation until the late 1960s, where the curve tilted strongly upwards at a much higher rate, and continues today.
What happened in the late 1960s? The advent of "free" healthcare!
The idea that a company is "siphoning out" value is fundamentally flawed. The company is creating value, and society enables it. This enablement is ongoing, and should be paid for with ongoing tax. If the actual value creator decides that they can get a better deal somewhere else, then barriers to exit come in because the government is trying to get more out of a company than it provided. (Since if there are superior places to operate, the worth of what the state you are leaving provides must be overvalued, otherwise you wouldn't leave).
You'd have a point if Germany did anything to actually support businesses scaling instead of trying to kneecap them at every turn
I think most people would be okay with an exit tax if it's reasonable. Requiring the owner of a business generating €20k in profit to then pay €70k in taxes is not reasonable.
Canada also has an unreasonable exit tax. Canadian founders are taxed on 50% of the FMV of their shares on departure. So if you own half of a company that is worth $50m, your taxable income for the year of departure is increased by $12.5m.
Agreed. As mentioned in another comment, I think it'd be fair to levy the exit tax when you actually sell your company in the future. Like, if I ever sell my business, I'd be happy to pay my fair share of German taxes on said business, even if I'd no longer be a tax resident of Germany.
The current implementation which essentially simulates a "virtual" sale of your business once you leave the country is pretty terrible, as most normal humans don't have that sort of cash on hand because, well, they actually didn't sell their business at that point in time.
Interesting pointer on Canada - thanks!
Perhaps you would apply the same logic to a family car, or the clothing you bought? Should they tax the value of your medical degree when you leave the country?
Yes.
Remember that in Germany you don't pay for University degrees. High education isn't just for a wealthy minority.
That doesn't make the degree worthless, surely
I would assume that logic is applied.
Exit taxes are generally applied as if the taxpayer sold all capital assets on the day of leaving.
At least in the US taxation regime (I'm unfamiliar with others), family cars don't qualify for a capital loss, and rarely appreciate. Clothing would be similar.
But it doesn't seem unreasonable that a country should want to be paid tax on unrealized gains as you're leaving. It would probably be more fair to wait until the gains were realized and then apportion the gains among the countries of residence, but if you're leaving, it's going to be hard to compel your participation later, so it makes more sense to do it as you're leaving.
In many cases people want to move precisely because Germany doesn't provide as good infrastructure for startups as other countries.
Also, the "you can't leave because you owe society" argument, while not necessarily wrong, is strongly associated with the abuses of Communism.
In the article it shows that very rich owners can evade the tax (probably they've already planned and left!), while middle class people the tax wipes out their business and probably send them bankrupt. It's more like handcuffs than socialism.
I am sure they could achieve the same goals of fair tax but learn some game theory before doing so.
You talk as if society and the infrastructure society paid for somehow belonged to the state.
Yes globalism is bad :) outside of certain forms of trade. Next up, remittances.
yep, there’s a reason these people start their businesses in stable economied countries, yet certain groups of them do everything to pretend they owe nothing back.
i’d love to see a comprehensive study on how much corporate tax avoidance costs a country vs food stamps so we can get an accurate view on who leeches/gains more. my suspicion is corporate wage theft/tax avoidance/evasion/subsidies are significantly higher, particularly if we add in executives and major stock holders.
Man soll den Flüchtlingen aus Deutschland keine Träne nachweinen, eh?
> State that let you build
Excuse me, why I need state permission for building business?
[flagged]
This comment is in breach of several guidelines. I understand these are important topics and it's fine to raise these points, but HN can only be a good place for discussing difficult topics like these if people make the effort to avoid inflammatory rhetoric.
Please take a moment to read the guidelines and make an effort to observe them in future, particularly these ones:
Be kind. Don't be snarky. Converse curiously; don't cross-examine. Edit out swipes.
Comments should get more thoughtful and substantive, not less, as a topic gets more divisive.
When disagreeing, please reply to the argument instead of calling names. "That is idiotic; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3."
Please don't fulminate. Please don't sneer, including at the rest of the community.
Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith.
Eschew flamebait. Avoid generic tangents. Omit internet tropes.
Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something.
Please don't use Hacker News for political or ideological battle. It tramples curiosity.
https://news.ycombinator.com/newsguidelines.html
[flagged]
Please don't use HN for ideological battle and please don't post canned comments or pre-existing talking points.
None of that is what the site is for. We want curious conversation.
https://news.ycombinator.com/newsguidelines.html
For a less emotional explanation of exit tax see https://www.grantthornton.de/en/insights/exit-tax-topic-hub.
> The purpose of this rule is to tax the increase in value of these shares that came about in Germany but has not yet been realised before they are able to escape the reach of German taxes by the move abroad.
Doesn't sound all that crazy to me.
Also, the proposed analogy to the Berlin wall feels quite pathetic for those that have actually lived behind it.