- A capital increase with a premium is carried out by issuing new shares above the nominal value.
- The difference between the issue price and the nominal value is allocated to the capital reserve as a premium.
- Gift tax risks arise if the issue price is below the market value.
- A gift to the subscribers may be taxable if the issue price is low.
- The issue price should correspond to the market value in order to avoid gift tax.
- A valuation report can help to correctly determine the market value.
- A price adjustment clause can subsequently increase the issue price if the market value increases.
What is a capital increase with a premium?
A capital increase with a premium means that new company shares are issued at a higher price than the nominal value. The difference between the issue price and the nominal value is known as the premium and is allocated to the company’s capital reserves[1].
Gift tax risks
A capital increase with a premium can be problematic from a gift tax perspective if the issue price of the new shares is below the market value. In this case, a gift may be made to the subscribers of the new shares, which is subject to gift tax[1].
Solution approaches
In order to avoid a gift tax liability, the issue price of the new shares should correspond to the market value. This can be determined by a valuation report. Alternatively, a price adjustment clause can be agreed, according to which the issue price is subsequently increased if the market value is higher[1].
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