Inclusion in aggregate wages and salaries of the remuneration paid to members of a partnership pursuant to Section 13a of the Inheritance and Gift Tax Act (Erbschaft- und Schenkungsteuergesetz, ErbStG)
Disputes between taxpayers and the fiscal administration regularly occur when determining the condition for the preferential tax treatment of business assets in the case of gifts and legacies. In particular, the inclusion in so-called aggregate wages and salaries of the remuneration paid to members of a partnership has hitherto been the subject of dispute. The tax court (Finanzgericht, FG) in Münster has now taken a clear position on this.
In their ruling of 15.4.2025 (case reference: 3 K 483/24 F), the judges decided that remuneration paid to members of a partnership - even though, for income tax purposes, it constitutes extraordinary operating income - has to be included in aggregate wages and salaries pursuant to Section 13a(4) ErbStG. The court thus explicitly opposes the administrative opinion in Guideline E 13a.5 of the German Inheritance Tax Guidelines 2020. The limited partner (Kommanditist) in a German limited partnership (Kommanditgesellschaft, KG) worked as a managing director in the business and received remuneration for this that was recorded under ‘wages and salaries’ in the profit and loss statement. The local tax office did not factor in this remuneration into its calculation of aggregate wages and salaries because partners who are managing directors are not ‘employees’ within the meaning of Section 13a ErbStG.
The FG upheld the complaint. According to the wording and purpose of Section 13a(4) ErbStG, any remuneration that is paid in return for work performed in the business has to be included - irrespective of its income tax categorisation. Its classification as income from employment (Section 19 EStG) is not important here nor are its social insurance features. The determining factor is that, under commercial law, it is treated as an expense in the item ‘wages and salaries’ (Section 275(2) no. 6 of the German Commercial Code). In the opinion of the court, this item includes any remuneration for individuals who have an employment contract with the company - including the total gross remuneration of partners who are managing directors. The commercial law perspective is relevant because it represents the actual economic expense for the work performed. Partner status alone does not rule out inclusion in aggregate wages and salaries.
