Attention, start-ups: No tax relief for sole-shareholder directors in marginal employment!
Particularly during the initial phase of a Start-ups, the question often arises as to whether a Sole shareholder and managing director can work for a GmbH on a ‘minijob’ basis. As well as being exempt from compulsory social security contributions, marginal employment offers the advantage that the income tax due is calculated in accordance with Section 40a(2a) of the Income Tax Act (EStG) can be calculated at a flat rate of 2%, rather than at the individual tax rate.
However, in its ruling of 8 August 2023, the Federal Fiscal Court (BFH) rejected the flat-rate taxation scheme and ruled that a sole shareholder-director must pay tax on their salary at their individual tax rate. The prerequisite for the tax relief is that the salary must derive from (marginal) employment subject to social security contributions.
However, as the sole shareholder and managing director holds a stake in the GmbH, he is exempt from social security contributions, meaning that, according to the Federal Fiscal Court (BFH), the conditions for flat-rate taxation are not met.
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