Weismann Tax Firm

Elena Weismann
Graduate Economist, Tax Consultant
Certified Consultant for International Tax Law

Review of the remuneration of the managing partners of a limited liability company (GmbH)

by Elena Weismann in News from tax law

The remuneration of the managing partners must be reviewed regularly for their reasonability. The following salary components are taken into account during this review: Fixed salary (including overtime compensation), additional compensation (e.g. vacation pay, bonuses, gratification), pension commitments as well as benefits in kind.The remuneration components may not be provoked by the company relationship both in terms of reason and amount. In addition, the individual salary components and the total compensation must be appropriate. After this it should be examined whether or not a foreign managing director, that is not a stakeholder in the GmbH, received remuneration for their work. It may also be necessary to limit the bonus and total compensations to a certain maximum amount, e.g. in the event that there are further benefits received from other activities. If a GmbH employs several managing directors, remuneration deductions must be made, particularly in the case of small business enterprises. In order for the remunerations of the managing partner/director to be considered as operating expenditures, there must be a previous employment contract set in place. In this contract it must be formulated clearly and unambiguously which remunerations the managing partner/director receives. If these agreements are missing, then there is a hidden distribution of profits. Both the new determination and all changes to the remuneration are generally determined in advance at a meeting of the shareholders.


Due to the large number of judgments and opinions on this subject, it makes sense to manage the overall remuneration with the tax consultant.

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