Employee participation in startups: Too small steps

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The Bundestag is today deciding on the Fund Location Act, which is intended to make employee participation in startups easier. Bitkom President Achim Berg explains :

"With the Fund Location Act, the federal government wants to advance employee participation for startups - but it is still taking too small steps along this path. Despite months of debate, the new regulation still fails to meet the needs of the vast majority of startups and their employees.

The so-called "dry income" problem, which is currently a major obstacle to employee participation, is unfortunately only being addressed half-heartedly. belarus gambling data In future, employees will no longer have to pay tax on their shares when they are transferred if they have not yet earned any income from them. However, the problem remains unchanged if they change employers or after the deadline set out in the law has expired. This does not eliminate the risk that the tax burden will have to be paid before any income from the shares sold has been received.

Startups also face difficult and contentious valuations of the shares given to employees, as well as other record-keeping obligations. This means that employee participation will remain rather unattractive for startups in Germany compared to other countries, which represents a clear disadvantage in the competition for the best experts.

A much simpler solution would have been to treat the benefits from employee participation as capital income and to subject them to taxation only when the participation is sold.

It is encouraging that the tax allowance for employee participation is significantly higher than the originally planned amount of 360 euros. However, the allowance still falls well short of the regulations in other countries and the actually required allowance of at least 5,000 euros."