The reformed exit tax – economic, behavioural, constitutional and EU law aspects

Stiftung Familienunternehmen
Munich, 2022
Universität Halle-Wittenberg
Prof. Dr. iur. Gerhard Kraft

Exit taxation – an unnecessary reform

From the core issue of exit taxation to the individual steps in the legislative process and the legal consequences – over nearly 180 pages, auditor and tax consultant Professor Gerhard Kraft looks at the legal structure and the resulting consequences of the current exit tax. It is due if someone owns shares in a corporation and moves their place of residence or habitual abode abroad. It was reformed at the beginning of 2022.

The purpose of exit taxation is actually to prevent capital flight. However, in the opinion of many experts, the reform misses the mark by far. And according to Kraft, it wasn’t even necessary in the first place. He is convinced that small changes to the existing law would have sufficed to avoid what are known as circumvention offences.

Using four specific examples, the report shows how radically the current law interferes with the fate of families – and explains why it not only violates higher-ranking EU law, but also the rights to freedom and equality enshrined in Germany’s Basic Law.

The author’s clear demand: “The current rules on exit taxation should be brought back into conformity with EU law and constitutionally sound conditions sooner rather than too late.”

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