A property-holding GmbH that forms subsidiaries on behalf of its shareholders loses the extended trade-tax reduction for real estate, even if the new shares never reach the open market
Bundesfinanzhof. The Bundesfinanzhof holds that founding a GmbH for others — set up from the outset to be transferred promptly so that third parties earn from administering the capital — is not administration and use of own capital assetsBundesfinanzhof. The formation serves to manufacture a transferable asset rather than to draw fruit from substance the company keeps.
The extended reduction under § 9 Nr. 1 Satz 2 Gewerbesteuergesetz replaces the standard 1.2-percent-of-assessed-value cut under Satz 1 with a reduction of the trade income attributable to administering and using own real estateBundesfinanzhof, but only for businesses that exclusively administer and use own real estate, alongside own capital assets at mostBundesfinanzhof. Exclusivity runs qualitative, quantitative and temporalBundesfinanzhof; any breach forfeits the whole reduction, with no de minimis or proportionality escapeBundesfinanzhof. What counts is actual management, not the articles of associationBundesfinanzhof, and only narrowly defined side activities — those strictly necessary to sensible management of the property, plus the exhaustively listed permitted activities — stay harmlessBundesfinanzhof. Shareholders and related persons are third parties to the corporation under the separation principleBundesfinanzhof, so dealing only with them is still dealing with othersBundesfinanzhof.
The claimant, a GmbH founded in 2014Bundesfinanzhof and owned fifty-fifty by two other GmbHsBundesfinanzhof with no staff of its own, sold a property bought in 2014Bundesfinanzhof under a 2016 notarial contractBundesfinanzhof and claimed the extended reduction on the gain for 2016Bundesfinanzhof. Between 2014 and 2018 it had founded around forty companiesBundesfinanzhof and equipped them with equityBundesfinanzhof; thirteen self-founded companies were resold after short holding periodsBundesfinanzhof, seven within a year of formationBundesfinanzhof. Nine went to its shareholders or persons close to themBundesfinanzhof, four to outside buyersBundesfinanzhof. The Finanzamt denied the reductionBundesfinanzhof after an external audit showed the pattern: found a company, have it sign a land purchase, sell the shares before or with the transfer of possessionBundesfinanzhof. The Finanzgericht Berlin-Brandenburg had allowed the reductionBundesfinanzhof, reasoning the company showed no commercial character because it had addressed no marketBundesfinanzhof — its shareholders were not third partiesBundesfinanzhof and did not stand in for the marketBundesfinanzhof.
The Third Senate reverses that reasoning on both prongsBundesfinanzhof. Founding for others was established on the lower court's own findingsBundesfinanzhof: the companies taken over for shareholders or related personsBundesfinanzhof, including N Grundbesitz — formed in June 2015Bundesfinanzhof and sold in the dispute yearBundesfinanzhof after ten monthsBundesfinanzhof — and P — formed in the dispute year for the shareholdersBundesfinanzhof and transferred the next yearBundesfinanzhof — made the claimant act as a producer for its owners rather than as a keeper drawing fruit from its own substanceBundesfinanzhof. A market participation recognisable to third parties is not a precondition for denying the extended reductionBundesfinanzhof. The court expressly rejects the audit office's further argument for a modified three-object threshold for GmbH-share transfersBundesfinanzhof, while leaving open the conditions of the reallocation case law. Whether the reduction would fail on additional grounds — such as managing own real estate throughout the year — is left undecided as immaterial to the outcome; the decision was ripe for dismissal of the action.
Legal basis: BFH judgment of 18 June 2026Bundesfinanzhof, III R 29/23Bundesfinanzhof; § 9 Nr. 1 Satz 2 GewStGBundesfinanzhof; separation principle for capital companies.
Advisers to property-holding GmbHs that form subsidiaries for shareholders should treat each for-others formation as fatal to the extended reduction and test exclusivity across all years.
