Sale of partnership interests – Earn-out payments only have to be taxed when they are received
According to a BFH ruling of 9.11.2023 (case reference: IV R 9/21), claims for payment of the purchase price that are profit-related and sales-related may only be reported when the vendor realises them on the date they are received. They constitute purchase price claims subject to a condition precedent where, initially, it is not yet clear whether or not the claims will arise and in what amount. In the view of the court, these uncertainties justify excluding these types of payments from the calculation of capital gains as at the closing date.
Outcome: Earn-out payments have to be taxed as subsequent operating income at the time when payments are received. As in the case in question, this might even be several years after the sale of the stake.