Anyone holding at least one percent in a corporation who gives up German residence triggers a deemed disposal under § 6 AStG: the appreciation is taxed although no sale occurred. The question belongs before the move, not after. As of 09/2026.
The reflex that gets expensive
In many minds the sequence looks like this: move first, incorporate, settle in — then call the tax adviser. That order costs money, because the decisive moment lies before departure.
Anyone holding at least one percent in a corporation who gives up German residence triggers a deemed disposal under § 6 of the German Foreign Tax Act. The tax office treats the shares as if you had sold them on the day you left. What is taxed is the appreciation since acquisition — although not a single euro has moved.
Why it catches so many people
The provision does not target corporate groups. It catches the tradesman who started twelve years ago with EUR 25,000 of share capital and whose business is worth considerably more today. It catches the agency that never distributed but reinvested. It catches the stake in a friend's company that you had almost forgotten.
Three misconceptions come up regularly:
- "But I'm not selling." That is precisely the point. The tax arises without a sale, purely through departure.
- "The company stays in Germany." That changes nothing. What is taxed is not the company but your shareholding in it.
- "I just won't deregister." Then unlimited tax liability generally persists — with all the consequences for your worldwide income. That is not a solution, it is a different problem.
What to settle before departure
Valuing the shares is the core of it. It determines the amount, and it is more negotiable than many assume — as long as it happens beforehand. Afterwards you are arguing about a tax claim that already exists.
These five questions belong on your tax firm's desk before you deregister:
- Which shareholdings fall under § 6 AStG at all, including old and small ones?
- How are they valued, and which valuation method fits my case?
- Is deferral an option, and what security does the tax office require for it?
- Would restructuring before departure change anything — and can it be done in time?
- What happens if I return in a few years?
Exit Palm does not provide tax advice. We know the questions, the sequence and the deadlines — answering them is for licensed tax advisers in Germany. We involve them early instead of passing on half-knowledge.
Residence is the trigger, not deregistration
Deregistering at the residents' office is an administrative act. For tax purposes something else counts: whether residence and habitual abode have genuinely been given up. An apartment available to you at any time — including a room at your parents', including a let apartment you can access — can keep unlimited tax liability alive.
That cuts both ways. Keep the apartment and you may not have left for tax purposes at all. Give it up and you may thereby trigger exit taxation. Both belong decided deliberately, not in passing.
What we recommend
Talk to a German tax firm before you cancel a lease or apply for a licence. The effort is manageable; the difference in outcome is not.
If you want to know what your structure in the Emirates could look like afterwards: that is what the first consultation is for — including naming what needs a law or tax firm.
Exit Palm does not provide legal or tax advice. For legal and tax questions we work with licensed partners in Germany and the UAE. All information without warranty, as of the date shown.