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The year 2023 represents a turning point in the tax treatment of business liquidations. When the Tax Amendment Act 2023 came into force, the tax regulations for companies wishing to discontinue their business activities were fundamentally revised.

Key points of the Tax Amendment Act 2023:

  • Business assets: A central element in the dissolution of a company is the question of how to deal with the previous business assets.
  • Tax implications: These assets can either be sold, generating income for the company, or they can be transferred to the owner’s private assets.
  • Changes for buildings: While land has been transferred tax-neutrally in recent years, based on its book value, there is a special regulation for buildings.
  • Sale of buildings: This regulation offered a tax exemption for buildings until June 30, 2023. However, this regulation was changed as of July 1, 2023.

In-depth analysis of the tax changes: The Tax Amendment Act 2023 represents a milestone in the tax landscape, particularly with regard to the regulations surrounding business liquidations. This law has not only established clear and precise guidelines for the tax treatment of business liquidations, but also provides special provisions for particular scenarios. Such a scenario occurs when the main assets of a business are transferred to the owner’s private assets. This is often the case when a company owner retires and has no successor for the business.

In these special cases, it is not unusual for certain assets of the company to be sold on the market in order to generate liquidity. Any proceeds from these sales must be carefully recorded in the accounts and taxed accordingly. But what happens if no such sales take place? In such cases, the current market value of these assets at the time of their transfer to private assets is used. This value then serves as the basis for the tax valuation.

Another important aspect that requires special attention concerns business premises and buildings in particular. In the past, properties belonging to a business were transferred on a tax-neutral basis and based on their book value. For buildings, however, there was a specific regulation that granted them a tax exemption. This regulation was in force until June 30, 2023. However, this regulation was revised with the new Tax Amendment Act. From July 1, 2023, buildings, like land, will be transferred at book value with no tax impact. However, it is important to note that if the building is sold at a later date, tax will be payable based on the sale proceeds and the original book value.


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