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The GmbH – Bonus inflow in the case of a delay in the approval of the annual financial statements

According to a court ruling, in the case of controlling shareholding managing directors it should be assumed that an inflow of income could be deemed to exist earlier even without payment or a credit transaction. Whether or not the inflow should be notionally brought forward in the event of a delay in the approval of the financial statements was the subject of a recently published ruling by the Federal Fiscal Court (BFH).

The Munich judges based their justification on the argument that it is usually in the hands of controlling shareholders to have amounts paid out that are due to them if the claim is straightforward, undisputed and payable. However, this notional inflow only applies to salary payments, or other remuneration

  • that the GmbH owes to the controlling shareholders and
  • that have impacted the calculation of the income of the GmbH.

Bonus claims only become due once the annual financial statements have been approved, unless the contractual parties agree a different payment date in an employment contract that is effective under civil law and complies with the arm’s length principle. However, in the case of a delay in the approval of the annual financial statements the bonus inflow will not be automatically brought forward to the date when it would have been due if the annual financial statements had been drawn up on time. This was the view of the BFH in its ruling from 28.4.2020 (case reference: VI R 44/17) also with respect to controlling shareholding managing directors.

In the case in question, according to the employment contracts of the shareholding managing directors, the bonuses were due and payable one month after the approval of the annual financial statements by the shareholders’ meeting. For higher bonuses, as in the above-mentioned case, a business naturally needs more time to produce the liquidity for the payment and that is why the BFH accepted one month’s delay.

Please note: The BFH ruled that the delay in the approval of the annual financial statements was unimportant in this case, since the lower tax court had not established that the legal requirement for timely approval of the annual financial statements had not been complied with “arbitrarily”.

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