For inventory taxation purposes, the common value of unlisted securities and uncertificated shares can be derived from sales. If this is not possible, an estimation procedure is used. This so-called Stuttgart method takes into account the assets and earnings prospects of a corporation and is therefore oriented towards both substance and earnings value.
Based on the unit value of the business, the asset is determined by adding and reducing it and comparing it with the nominal capital. The calculation of the earnings percentage is based on the taxable income of several years. Taking into account additions, reductions and a flat-rate discount, an average annual income is calculated compared to the nominal capital.
The common value according to the Stuttgart method corresponds to around 68 %, the sum of the asset and five times the earnings percentage. The Stuttgart procedure is of particular importance for the valuation of GmbH shares.