Assessed on the net worth

Comprehensive exemption rules (Verschonungsre-
gelungen) exist for the transfer of so-called business property lo-
cated in Germany or an EU/EEA Member State (business assets
or substantial shareholdings in corporations). If the benefciary/
donee retains the property in his possession for the seven-year
period required by law and the annual payroll total reaches 700%
of the initial payroll in that period, the benefciary/donee can
obtain a tax exemption of up to 100%, depending on the model
that has been chosen.

However, in December 2014, the Federal
Constitutional Court declared these “exemption regulations” for
business property to be unconstitutional. The legislative process
has already begun and is expected to be completed by June 30
2016. Until then, the currently valid regulations must still be ap-
plied. However, there is no protection of legitimate expectation
with regard to a possible retroactive effect.