Holding company (Holding)
Also: Holding, Holdinggesellschaft, Holding-GmbH, Holding-UG, Beteiligungsgesellschaft
In short
A holding is not a legal form, but a structure in which a parent company, usually a GmbH or UG, holds shares in one or more subsidiaries. With a shareholding of 10% or more, 95% of the subsidiary's profit distributions remain exempt from corporation tax at the holding level.
Holding company (Holding) explained
The parent holds and manages the shareholdings, while the subsidiary runs the operating business. For dividends, the exemption under Sec. 8b KStG requires a shareholding of at least 10% at the start of the calendar year; for trade tax, 15% at the start of the assessment period (Sec. 9 no. 2a GewStG). With a multiplier of 400%, a tax burden of around 1.5% remains at holding level. This pays off above all when profits stay in the structure and are reinvested, because whatever the holding distributes to you, you pay tax on privately. This is offset by the costs of running two companies.
