Tangible and intangible assets
Tangible and intangible assets are transferred to the tax accounts
of the purchaser at acquisition cost.
Any excess amount is
capitalized as goodwill, which is amortized for tax purposes over
a period of 15 years. Depreciable assets are depreciated over
their useful lives (based on the offcial tax depreciation tables).
Land and participations in other companies are not subject to
Step-up structures involving an internal asset deal (i.e. Where
the business of an acquired corporation is sold within the group
by way of an asset deal) may generate tax benefts if the seller’s
corporation has tax loss carryforwards, in particular when such
loss carryforwards may be forfeited in the future .
The seller will have to recognize hidden reserves, which
are fully taxable for corporate income and trade tax purposes and
may be offset against the tax loss carryforward. However, due
to minimum taxation rules, such transfers may still result in a tax
burden, which has to be weighted against the future tax savings
resulting from the step-up received on the assets.