Conversion (Genetic Taxation)

The conversion represents a section of the genetic taxation. Under the generic term of conversion or restructuring (in Austria reorganization) the processes of division, amalgamation and change of legal form are summarized. The company changes its organizational form; the Transformation Act and the Transformation Tax Act apply.

The conversion tax law regulates both the conversion of a partnership into a corporation or another partnership and, conversely, the conversion of a corporation. Methods for tax-neutral conversion are of central importance. The question of the valuation of the assets of the acquiring company in the event of a conversion is therefore particularly important.
Das UmwStG unterscheidet zwischen der Einbringung eines Betriebs, Teilbetriebs oder Mitunternehmeranteils in eine Kapitalgesellschaft (§§ 20 ff. UmwStG) und der Einbringung in eine Personengesellschaft (§ 24 UmwStG). Bei der Umwandlung in eine Kapitalgesellschaft hat der Steuerpflichtige gem. § 20 II UmwStG ein Wahlrecht, die zu übertragenden Wirtschaftsgüter (aus der Überträger-Bilanz) nach der Umwandlung mit dem Buchwert dem Partial value oder dem Zwischenwert anzusetzen.

§ 24 II UmwStG contains the corresponding option for the conversion into a partnership. This right of choice gives the balancing party considerable design options. The approach of a partial or intermediate value leads to a realization of the hidden reserves of the brought in assets and therefore also to a taxation of these reserves. On the other hand, if the book value is carried forward, the hidden reserves are not realized.

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