The GmbH & Co. KG is a hybrid form, it therefore combines characteristics of the partnership with those of the corporation. The basic structure is a KG, in which a GmbH is involved as a personally liable partner. This ensures that liability is limited to the company's assets.
Steuerrechtlich sind für die Gesamtunternehmung die Regelungen der Personengesellschaften maßgeblich; ergänzend treten für die GmbH die Regelungen für die Besteuerung der Kapitalgesellschaften hinzu. Die GmbH & Co. KG ist eine Co-entrepreneurship und daher selbst nicht steuerpflichtig.
Your profit is determined uniformly at the level of the company and then separately subject to income and corporation tax separately at the level of the shareholders (GmbH and limited partners). Contracts under the law of obligations between the KG and the GmbH are recognized for tax purposes. An important exception is the managing director's salary of the GmbH if the managing director is also a limited partner of the KG.
Such payments are not deductible as business expenses. The GmbH & Co. KG is a very common legal form in Germany, as it combines advantages under company law with advantages under tax law (partnerships). There are seldom such complex hybrid forms in other European countries.