Anyone who gifts shares in a limited liability company (GmbH) must have their value assessed for gift tax purposes. The so-called simplified income-based valuation method is frequently used for this purpose. In a recent judgement, the Federal Fiscal Court has now clarified which expenses are considered extraordinary under this valuation method and may therefore increase the value of the shares.
What is the simplified income-based valuation method?
If shares in a company are gifted and there is no current market price available, the tax office determines the value on the basis of the company’s future earning capacity. This is based on the average annual profit of previous years. To ensure that this value reflects the future earnings situation as realistically as possible, the Valuation Act provides for certain adjustments: one-off or unusual expense items are added back to the profit, as they are not expected to affect future results.
The specific case: A freight forwarding company (GmbH) and high customs duties
In the case in question, a shareholder in a freight forwarding limited liability company (GmbH) had gifted half of his shares to another party in 2017. The tax office determined the value of the shares using the simplified income approach, adding interest on customs duties as extraordinary expenses. This interest had arisen because the GmbH had been held liable for customs debts that were largely caused by fraudulent acts on the part of third parties. The proceedings had dragged on for years, causing the interest burden to rise significantly.
The GmbH contested this, arguing that these interest expenses should be deducted in full from its income. The Finance Court dismissed the claim, and the Federal Fiscal Court (BFH) upheld this decision in its judgement of 6 May 2026 (case number II R 2/24, published on 16 July 2026).
The Federal Fiscal Court’s ruling
The Federal Fiscal Court (BFH) clarified that extraordinary expenses within the meaning of the Valuation Act are those which are not expected to affect the annual income that can be sustainably generated in the future. It is irrelevant whether or not the costs were incurred in the course of normal business operations.
Whether expenses are to be classified as extraordinary must always be assessed on the basis of an overall assessment of the individual case. Three criteria are decisive in this regard:
- Legal basis for its creation: How did these expenses arise, and is this a one-off or a recurring cost?
- Frequency: Have similar expenses been incurred on a regular basis in the past?
- Reasonable amount: How do these expenses compare with similar, standard costs?
In this specific case, the Federal Fiscal Court (BFH) recognised the extraordinary nature of the customs interest. The limited liability company (GmbH) had not demonstrated that comparable costs were to be expected in the future. The fact that the costs arose from fraudulent acts committed by third parties, combined with the unusually long duration of the proceedings, meant that the expenses constituted a one-off exceptional case which was not representative of the freight forwarding company’s normal profit situation.
What does this mean for business owners and heirs?
The ruling has practical implications for anyone who gifts or bequeaths shares in a company. One-off, extraordinary costs may increase the company’s value as determined for tax purposes, which in turn affects gift or inheritance tax. At the same time, however, the ruling also opens up the possibility of appropriately excluding unusual expenses from the profit base, provided that these do not in fact place a permanent burden on the company’s future earnings.
Anyone planning business succession or needing to have the value of shares assessed for tax purposes should carefully review and document the breakdown of results from previous years. Expert tax advice is highly recommended in all such cases.
Source: Haufe: Tax
This post and the accompanying image were created with the help of AI and have been editorially reviewed.
