Leaving Germany as an E-Commerce Entrepreneur: Tax Consequences for Your Shop, GmbH and Sole Proprietorship

Published on 30.09.2026

Leaving Germany as an E-Commerce Entrepreneur

Anyone who runs an online shop, an Amazon brand or a digital product can work from almost anywhere. For tax purposes, however, leaving Germany is not simply a change of address. For e-commerce entrepreneurs, the tax consequences of emigrating depend on the legal form in which the business is run, which assets it owns and where its goods and customers are located. This article sets out the legal position as of September 2026: exit taxation (Wegzugsbesteuerung) where a GmbH is involved, the deemed disposal of business assets (Entstrickung) for a sole proprietorship, the tax liability that continues after the move, and VAT. Foreign law is not covered here; an adviser in the destination country should always be brought in for that.

Overview: Which Legal Form Triggers Which Tax Consequence?

A common misconception is that deregistering at the local residents’ registration office settles everything. In reality, quite different provisions apply depending on how the business is structured.

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How a residence or habitual abode is actually given up for tax purposes is explained in our articles on habitual abode in German tax law and on the certificate of tax residence.

The Shop Inside a GmbH: Exit Taxation under Section 6 AStG

If you run your online business through a GmbH or a UG (haftungsbeschränkt), the German mini-GmbH, and hold the shares as private assets, Section 6 AStG (German Foreign Tax Act) is the central provision. It applies where three conditions are met together:

• As an individual, you were subject to unlimited German tax liability for at least seven of the last twelve years before emigrating.
• Within the last five years, you held a direct or indirect interest of at least 1 % in a corporation.
• Your unlimited tax liability ends because you give up your residence and habitual abode in Germany. Treated in the same way are a gratuitous transfer of the shares to a person who is not subject to unlimited tax liability, and the exclusion of Germany’s right to tax, for example under a double taxation treaty.

The law treats the event as if you had sold the shares at their fair market value (gemeiner Wert). The difference between that value and your acquisition costs is taxed, even though you receive no money (“dry income”). For shares held as private assets, the partial income method (Teileinkünfteverfahren) applies, so that 60 % of the deemed gain is subject to income tax; the solidarity surcharge and, where applicable, church tax are added.

Example (fictitious figures): Malte holds 100 % of a shop GmbH into which he paid EUR 25,000. On emigration, the fair market value of the shares is EUR 2,000,000. The deemed gain is EUR 1,975,000, of which 60 %, that is EUR 1,185,000, is taxable. Assuming a marginal tax rate of 45 %, income tax of around EUR 533,000 results, plus the solidarity surcharge. Malte would have to pay this sum without having sold the GmbH.

How Is the Value of the Shares Determined?

The decisive figure is the fair market value. Sales that took place less than one year earlier take priority. If there are none, the simplified capitalised earnings method (vereinfachtes Ertragswertverfahren) may be applied, provided it does not lead to an obviously inaccurate result (Section 11 BewG, German Valuation Act). Particularly for online retailers that depend heavily on their owner, on a platform such as Amazon or on a small number of advertising channels, this value can deviate upwards or downwards from a price actually achievable on the market. Anyone who holds reliable documentation on earnings, customer concentration and platform dependency is in a better position to challenge an excessive valuation. Whether the tax authorities apply too high a value in an individual case depends on the documents submitted.

Deferral, Return and Reporting Obligations

Since the reform by the ATAD Implementation Act (ATAD-Umsetzungsgesetz) with effect from 1 January 2022, there is no longer an unlimited, interest-free deferral. Under Section 6 (4) AStG, the tax may, on application and regardless of the destination country, be paid in seven equal annual instalments, which bear no interest. The application is generally granted only against the provision of security; whether security must be provided, and in what amount, should be clarified with the tax office in advance. The remaining tax becomes due immediately in particular if an instalment is missed, if duties to cooperate are not fulfilled, in the event of insolvency, on a sale or transfer of the shares, and on distributions exceeding one quarter of the value.

If the emigration is based on a merely temporary absence and you return within seven years, the tax claim can lapse under Section 6 (3) AStG. The tax office can extend this period by up to five years, that is, to a maximum of twelve years. This requires that the shares are not sold, transferred or contributed to business assets in the meantime, that distributions do not exceed one quarter of the value, and that Germany’s right to tax is restored to its original extent.

Under Section 6 (5) AStG, certain events must be reported to the tax office electronically, and your current address must be confirmed every year. Failure to fulfil duties to cooperate leads, under Section 6 (4) AStG, to the remaining tax becoming due immediately. The details of exit tax on GmbH shares are covered in our article on exit tax for GmbH shareholders.

The Sole Proprietorship: Deemed Disposal Instead of Exit Tax

If you run your shop as a sole trader or as a freelancer, Section 6 AStG does not apply because there is no corporation. The risk lies elsewhere: if business assets are transferred abroad in such a way that Germany can no longer tax the hidden reserves, this is treated as a withdrawal at fair market value (Section 4 (1) sentence 3 EStG, German Income Tax Act). If the right to tax the business as a whole is excluded, this is equivalent to a discontinuation of the business (Betriebsaufgabe, Section 16 (3a) EStG). An actual sale is not required for either.

The decisive question is what actually moves. If only the owner moves while the warehouse, staff and management remain in Germany, a German permanent establishment (Betriebsstätte) may continue to exist. If, on the other hand, the business moves as well, intangible assets in particular come into focus:

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The earlier case law on “final discontinuation of a business” has been superseded by the statutory rules, so that the assessment today is based on Section 4 (1) sentence 3 and Section 16 (3a) EStG. There is some relief for payment: under Section 36 (5) EStG, the tax on the discontinuation gain may, on application, be paid in five equal, interest-free annual instalments if the assets are allocated to business assets in an EU or EEA state; security is generally required. For individual fixed assets, a compensating item under Section 4g EStG may also be formed, which is released over five years with a profit-increasing effect. The requirements, including the application, are narrow; Section 4g EStG does not cover goods held as current assets.

Whether your shop is located abroad or in Germany for tax purposes therefore depends heavily on the actual circumstances. Useful background is provided by our articles on permanent establishments and home offices abroad and on moving a company’s registered office abroad.

What Many Overlook: ETFs, Securities Portfolios and Extended Limited Tax Liability

Investment Funds Held as Private Assets

Since the Annual Tax Act 2024, a private fund portfolio can also trigger exit taxation. Under Section 19 (3) InvStG (German Investment Tax Act), for events from 1 January 2025 a deemed sale applies if the total of the taxable gains is positive and, within the last five years, you held at least 1 % of the units issued by a fund or the acquisition costs of the units amount to at least EUR 500,000. Different rules apply to special investment funds. Anyone who has built up a larger ETF holding after selling their business should include this in their planning.

Extended Limited Tax Liability under Section 2 AStG

German nationals who were subject to unlimited tax liability for at least five of the last ten years before emigrating can remain subject to extended limited tax liability for up to ten years after the end of the year of emigration. This requires that they are resident in a low-tax jurisdiction or in no foreign state at all, and at the same time retain substantial economic interests in Germany. Such interests exist, among other cases, where German-source income amounts to more than 30 % of total income or more than EUR 62,000, or where assets in Germany amount to more than 30 % of total assets or more than EUR 154,000. The provision only becomes relevant once the income concerned exceeds EUR 16,500. The Federal Ministry of Finance (BMF) summarised its view on Section 2 AStG, Section 6 AStG and further provisions in a comprehensive administrative guidance letter dated 22 December 2023. The rule can become relevant for location-independent online entrepreneurs if they are resident in a low-tax jurisdiction or in no foreign state at all and retain substantial economic interests in Germany.

Inheritance and Gift Tax

For inheritance and gift tax purposes, German nationals continue to be treated as residents for up to five years after emigrating if they no longer have a residence in Germany (Section 2 (1) no. 1 ErbStG, German Inheritance and Gift Tax Act). Individual double taxation treaties may deviate from this. More on this in our article on German inheritance tax and double taxation treaties.

VAT: Your Place of Residence Is Not Decisive

VAT is linked not to you as a person but to the individual transaction. Emigrating therefore does not automatically end German VAT obligations. An entrepreneur can live abroad and still make taxable supplies in Germany. The questions to be answered are always: who supplies, what is supplied, to whom, where is the place of supply, and who owes the tax?

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Particularly important for online retailers:

• Warehouse: Anyone who continues to deliver from a German warehouse or through a fulfilment provider after emigrating generally remains obliged to register in Germany. If your own goods are moved to a warehouse in another EU state, this can constitute an intra-Community transfer, with registrations in both states.
• OSS: The One-Stop-Shop only bundles certain B2C transactions. It replaces neither local registrations for sales from a warehouse nor the deduction of input VAT. For businesses outside the EU there is the non-Union OSS (Section 18i UStG), and for distance sales of imported goods up to EUR 150 the IOSS (Section 18k UStG).
• Small businesses: The German small business scheme under Section 19 UStG applies to businesses established in Germany (prior-year turnover up to EUR 25,000, current year up to EUR 100,000). It cannot simply be taken along after emigrating. The notification procedure under Section 19a UStG is open only to businesses established in Germany that wish to use the small business exemption in another Member State; after emigrating, the exemption is governed by the law of the new state of establishment.
• Invoices: German VAT shown separately on an invoice “just to be safe” can create a tax liability of its own under Section 14c UStG. Every invoice template should be assigned to a clearly defined group of transactions. For domestic B2B transactions, the transitional period for e-invoicing ends at the end of 2026 for issuers with a higher prior-year turnover, and at the end of 2027 for issuers with a turnover of up to EUR 800,000.
• Do not deregister too early: The German registration should only be ended after a final review. Outstanding advance returns, prepayments, credit notes and input tax adjustments (Section 15a UStG) can continue to have an effect.

VAT in the destination country is governed by that country’s law. You should bring in a foreign adviser for this.

Legitimate Planning: Options and Limits

• Sale before emigrating: If the GmbH is actually sold before the move, the real gain is taxed, but you receive the liquidity to pay the tax. Whether this is economically more favourable depends on the price and the timing.
• Return rule: In the case of a merely temporary emigration, the tax can lapse under the conditions of Section 6 (3) AStG (see above).
• Transfer within Germany: A gift of the shares to a family member who remains subject to unlimited tax liability avoids Section 6 AStG, but can trigger gift tax. This includes examining a family foundation or a structured business succession.
• Conversion into a partnership: Often recommended, but not tax-neutral per se. Conversion, contribution and change of legal form follow the Reorganisation Tax Act (Umwandlungssteuergesetz) and can themselves trigger tax or lead to a later deemed disposal. Such a structure should only be chosen after an individual review.
• Cooperative: Shares in a cooperative (Genossenschaft) can also fall under Section 6 AStG; they are not a way out.
• What does not work: A mere letterbox abroad, a foreign company without substance, or an apparent emigration while the centre of your life remains in Germany.

Unclear legal position: obtain a binding ruling. Where the German tax treatment is not settled or may foreseeably change, an application to the tax office for a binding ruling (verbindliche Auskunft, Section 89(2) of the German Fiscal Code, AO) should come before implementation. For a precisely defined transaction that has not yet been carried out, the ruling binds the tax office, and it is subject to a fee. In our view, a tax adviser who does not recommend this in such a situation is acting irresponsibly: the client risks having to litigate over the outcome years later, which costs time and money.

Typical Mistakes When Online Entrepreneurs Emigrate

• Deregistration is equated with the end of all tax obligations.
• The shareholder moves, but the managing director continues to take all decisions from abroad: this can change the place of effective management of the GmbH. See our articles on relocating abroad and the managing director’s liability and on moving the registered office of a GmbH abroad.
• The warehouse or the fulfilment provider remains in Germany without the registration being reviewed.
• Intangible assets such as the trademark and the customer base are neither documented nor valued.
• An existing loss carryforward is not taken into account on emigration; see our article on loss carryforwards when emigrating.
• The reporting obligations under Section 6 (5) AStG and the annual confirmation of address are overlooked.

Checklist Before Emigrating

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Conclusion

For e-commerce entrepreneurs, the structure determines the tax consequences of emigrating: for a GmbH, exit taxation under Section 6 AStG is at the centre; for a sole proprietorship, it is the deemed disposal of business assets; and for location-independent work, extended limited tax liability can become relevant if the conditions of Section 2 AStG are met. VAT follows the individual transaction and the route of the goods, not the place of residence. Anyone who plans 12 to 24 months in advance, documents values and examines the options of a sale, a transfer or a return keeps the most room for manoeuvre. Legal position: September 2026. The rules change frequently; the current version must always be checked in the individual case.

FAQ

When does exit taxation apply to a shop GmbH?

When you were subject to unlimited tax liability for at least seven of the last twelve years, held an interest of at least 1 % in a corporation within the last five years, and give up your residence and habitual abode in Germany.

Do I have to pay exit tax as a sole trader?

Exit tax under Section 6 AStG does not arise because there is no corporation. However, if the business or business assets are moved abroad in such a way that Germany can no longer tax the hidden reserves, a deemed disposal under Section 4 (1) sentence 3 and Section 16 (3a) EStG may occur.

Can I pay the tax in instalments?

Under Section 6 AStG, in seven annual instalments, generally against security. For the deemed disposal of a business, Section 36 (5) EStG provides for five annual instalments, provided the assets are allocated to business assets in the EU or the EEA. In both cases an application is required.

Do I still have to pay German VAT after emigrating?

That depends on the individual transaction. For goods shipped from a German warehouse, or for digital services to German consumers, German VAT remains relevant. For B2B services to German businesses, the customer often owes the tax.

Can I avoid exit tax by returning?

The tax claim under Section 6 (3) AStG can lapse in the case of a merely temporary absence and if the further conditions are met: return within seven years (extendable to up to twelve years), no sale of the shares, limited distributions and a restored right to tax.

Does emigration also affect my ETF portfolio?

Yes, under the conditions of Section 19 (3) InvStG, in particular with a holding of at least 1 % in a fund or acquisition costs of at least EUR 500,000, and only if the total of the taxable gains is positive.

Attorney Dr. Johannes Fiala advises on international tax and asset law and supports entrepreneurs in preparing an emigration from a tax and legal perspective, from classifying the legal form and valuation through to deferral and VAT. Please get in touch without obligation to discuss your specific case in an initial consultation.