12 May 2015

As announced at the beginning of last month, the government has made new decisions regarding the liquidation reserve in the course of the budgetary control at the end of March. The exact formalities for this new enactment were at the time unknown. Meanwhile, most of the uncertainties have been clarified by means of a draft programme law.

The liquidation reserve

The regime of the liquidation reserve allows SME’s to transfer some or all of the accounting profit of the financial year (liquidation reserve) to an unavailable equity account and to pay an immediate advance levy of 10% on this amount. Upon liquidation, no more tax will be charged in this respect. Other profits which are distributed will be subject to a 25% tax. According to the original regulations for the liquidation reserve, this is only possible for profits gained in the course of financial year 2014 – assessment year 2015.

A draft programme law now provides for an extention of this tax regime to include the profit after tax of financial years 2012 and 2013 by means of a “special liquidation reserve”. 

Modalities of the extended regulation

The profit after tax of the assessment years 2013 and 2014 can therefore still be allocated to a special liquidation reserve. Of course, this only applies under the assumption that these profits have not yet been distributed. 

It should also be taken into account that the requirements to qualify as an SME need to be analysed for the respective financial years. A company that currently does not qualify as an SME could have met the requirements in the course of the financial years 2012 or 2013 and still build up a special liquidation reserve for those years.

The payment of the 10% special liquidation tax needs to be effected on 30 November 2015 at the very latest for the special liquidation reserve in relation to profits of the financial year linked to the assessment year 2013 and on 30 November 2016 at the very latest for the special liquidation reserve regarding profits of the financial year linked to the assessment year 2014.

The waiting period for the distribution of the liquidation reserve at the reduced withholding tax starts as of the end of the financial year in the course of which the special liquidation reserve was allocated.  

The allocation of a special liquidation reserve does not prevent the simultaneous allocation of a ‘normal’ liquidation reserve. 


For further information, please do not hesitate to contact your regular BDO contact person, or send an e-mail to [email protected]