Germany's Exit Tax: A Berlin Wall for Entrepreneurs?
2025-08-08
Germany's exit tax acts as a significant barrier for entrepreneurs, effectively trapping them in the country. If you own over 1% of any limited liability company (including foreign ones) and the company is profitable, you face a potentially crippling exit tax. This tax is calculated by multiplying the average earnings of the past three years by 13.75, then by 0.6, and finally applying your personal income tax rate. This article analyzes the tax burden in different scenarios, suggesting that entrepreneurs with moderately profitable businesses and plans to leave Germany should consider doing so before their company grows significantly to avoid a massive tax bill.
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(eidel.io)
Startup
German exit tax