No wages in the case of a gift transfer of company shares to secure company succession (BFH of November 20, 2024, VI R 21/22)

Facts of the case

As part of the company succession, the shareholders of a GmbH decided to transfer their shares to their son and several senior employees, including the plaintiff, free of charge. The aim was to ensure the long-term continuation of the company, as the son was unable to take over the management of the company alone due to other professional commitments.

The transfer was made without consideration and was not part of the employees' employment contracts. However, the tax office deemed the transfer to be taxable wages in accordance with Section 19 para. 1 sentence 1 no. 1 EStG. The plaintiff filed a lawsuit and argued that the transfer was solely for the purpose of securing the company and not as remuneration for her work.‍

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Findings from the decision

Differentiation between wages and other benefits:

The BFH clarified that benefits only count as wages if they are granted in return “for” the employee's work. In this case, however, there was no connection between the transfer of shares and the work performed.

Focus on succession planning:

The transfer was exclusively intended to secure the company's succession. The involvement of the senior employees as shareholders was intended to promote the stability of the company and was not part of the remuneration.

Case-by-case assessment decisive:

The BFH emphasized that the tax classification of benefits always requires an overall assessment. Reasons such as business necessities and the objective of the transfer are decisive.

No automatic classification as wages:

Not every benefit from an employer or its shareholder to an employee is taxable wages. If there is no connection with the work performance, there is no remuneration.

Value of the company succession:

The long-term continuation of the company was the focus of the decision. The transfer was a strategic step to ensure the stability and sustainable management of the company.

Consequences for practice

This ruling strengthens legal certainty in succession planning.

Companies can ensure that benefits such as shares are not automatically treated as wages if they serve strategic or entrepreneurial purposes.

Tip: Document the purpose of the transfer precisely to avoid misunderstandings with the tax authorities.

This ruling provides a good guide for arrangements of this kind.