“Do I need a holding?” is the most common question entrepreneurs ask after their third or fourth profitable year. The honest answer is: It depends on four variables — and as soon as three of them are met, the holding is not just an option, but a necessity.
In our practice, we regularly see two extremes: entrepreneurs who start considering a holding with an annual profit of €80,000 (too early, the effort outweighs the benefits) — and entrepreneurs who, with a profit of €800,000, wanted to "wait a bit longer" for years (too late, the tax savings of five years can no longer be recovered).
The four thresholds in detail
1. Annual profit from €200,000
Below this threshold, the ongoing costs of the holding structure (additional annual financial statements, corporate tax return, possibly consolidated financial statements) outweigh the tax advantage. The rule of thumb: The holding should generate at least €8,000–12,000 net tax advantage per year — otherwise, the effort is not worth it.
2. Multiple holdings or business areas
If you hold a GmbH plus a property plus a patent license, you have three spheres of liability, which should not be mixed. The holding is the standard tool for risk separation here.
3. Planned exit or generational change
If you sell your GmbH directly, approximately 28% tax applies to the capital gain (with partial income method). If the holding sells the GmbH, 95% of the profit is tax-free under § 8b KStG. In the case of a sale for €5 million, this amounts to approximately€1.1 million in tax savings.
4. Retained earnings
If you want to reinvest profits instead of distributing them, the holding is ideal. It collects distributions from the operating subsidiary 95% tax-free and can then redirect it into new investments without further tax burden.
The mechanics of tax savings
Simplified calculation, without holding:
| Position | Amount |
|---|---|
| Annual profit GmbH | 1.000.000 € |
| Corporate & trade tax (~30%) | − 300,000 € |
| Distribution to shareholders | 700.000 € |
| Withholding tax 25% (+ solidarity surcharge) | − 184,625 € |
| Net to the shareholder | 515.375 € |
With holding (profit remains for reinvestment in the holding):
| Position | Amount |
|---|---|
| Annual profit operational GmbH | 1.000.000 € |
| Corporate & trade tax operational | − 300,000 € |
| Distribution to holding | 700.000 € |
| Tax holding: 5% is considered taxable × 30% | − 10,500 € |
| Assets in holding for reinvestment | 689.500 € |
The difference: ~174,000 € per year available for reinvestment in the holding instead of disappearing into personal taxation. This is the leverage effect of the holding.
The holding is not a tax legacy tool, but a Reinvestment tool. As soon as you want to withdraw money from the holding personally, withholding tax applies. The holding is particularly worthwhile if you want to hold and let work assets in the system
When it is NOT worthwhile
- Annual profit below 150,000 €: The ongoing costs of the holding structure eat up the advantage.
- Planned imminent distribution to shareholders: If the money is going to be consumed personally immediately anyway, the holding has no effect — on the contrary, an additional tax level is created.
- Only one company, no growth planned: Anyone who wants to deliberately keep a small GmbH small and never seeks additional investments does not need a holding.
- No substance present: Mailbox holdings without real substance fail ATAD/BEPS — and bring more problems than solutions.
What happens next if you decide on a holding?
At TABAK Consulting, every holding formation begins with a Structure check: We assess your current situation, calculate the next 3–5 years, and show you which of the four thresholds are met. If three or more are met, the holding is almost always worthwhile. If fewer are met, we will tell you that too — better an honest no than a mandate from false advice.
The establishment of the holding company turnkey takes us 4–6 weeks and costs from €50,000 (operational GmbH) or from €75,000 (complete holding structure).
Are the threshold values met?
In a 45-minute structural check, we will calculate your situation together. Non-binding, honest, without sales pressure.
Request a structure check →