When you sell your small business, the proceeds are rarely tax-free. What gets taxed is usually not the full purchase price but the so-called gain on disposal: roughly the sale proceeds minus what the business is still worth on the books (its book value, or your original acquisition and production costs). Sell for more than the book value and a gain arises. Tax normally applies to that gain.
How high that tax turns out to be cannot be answered with a single number. Tax law changes constantly and differs noticeably between Germany, Austria and Switzerland. We deliberately avoid quoting current rates or allowances as fixed truths. That is what professional advice is for. What matters is understanding that taxes can take a real share of what finally reaches you.
A key factor is the structure of the sale. An asset deal (selling individual assets) is taxed differently from a share deal (selling the shares in the company). These differences change your tax burden, and they touch the buyer's interests too. That is why the topic often surfaces during the price negotiation.
For older sellers, some countries offer reliefs or allowances. In Germany, for example, there are easements under certain conditions from a certain age (55 is often mentioned) or in cases of permanent incapacity to work. Whether and to what extent this applies to you depends on many details and should be checked individually.
The most important recommendation is therefore to bring in a tax adviser early, ideally before the purchase agreement (SPA) is finalised. If you only do the maths after signing, you often can no longer use the available options.
For business sellers
As the seller, tax helps decide how much of the sale price actually stays with you after the deal. A business sold for 340,000 EUR may leave noticeably less after tax. That makes early planning, well before the price negotiation, all the more important.
Whether you sell as an asset deal or a share deal can change your tax burden. Have both options calculated before you commit, and record the outcome cleanly in the purchase agreement (SPA).
For corporate buyers
Tax matters to you as a buyer too. In an asset deal you can often depreciate the assets you take over across the years, which can lower your later tax. A share deal usually does not offer that advantage in the same way.
Because buyer and seller have different tax interests, it pays to raise the topic openly. A fair outcome in the price negotiation takes both sides into account and avoids nasty surprises after closing.
Example
Anna sells her small clothing-alterations shop for 120,000 EUR. On the books, the sewing machines, fittings and stock still stand at 35,000 EUR. The taxable gain is therefore roughly 85,000 EUR, not the full purchase price. Because Anna is 58, her tax adviser checks whether an age-related relief applies before the contract is signed.
FAQ
Do I have to pay tax on the whole sale price?
Usually no. Tax is normally charged on the gain, the sale proceeds minus the book value or your acquisition costs. Exactly how this is calculated depends on the country and the structure, so a tax adviser should work it out for you.
Are there tax breaks for older sellers?
In some countries, yes. In Germany, for example, there are reliefs under certain conditions from a certain age. Whether this applies to you and how large the benefit is should be checked individually. Fixed figures change over time.
Does the way I sell make a tax difference?
Yes, a clear one. An asset deal and a share deal are taxed differently. That affects what stays with you and the buyer's interests too, a point for the price negotiation.
When should I involve a tax adviser?
As early as possible, ideally before the purchase agreement (SPA) is set. Once you have signed, many planning options can no longer be used.
Does the buyer pay tax too?
There is usually no direct gain tax on the purchase itself, but the structure has consequences. In an asset deal the buyer can often depreciate the assets taken over and save tax later. Here too, professional advice pays off.
Is buying instead of founding worthwhile from a tax angle?
Buying instead of founding gives you a running business with customers and earnings, and in an asset deal often the option to depreciate the assets you take over. Tax-wise the purchase is no free ride, but with good advice it is predictable.
Why don't you quote specific tax rates?
Because tax law changes constantly and differs between Germany, Austria and Switzerland. Fixed numbers would quickly be outdated or wrong. For your case, please rely on current professional advice.
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