- Renting an apartment by a GmbH to the children of the shareholder-director does not constitute a hidden profit distribution if the rental agreement would not have been concluded with an unrelated third party at a significantly higher rent (arm’s length principle).
- The legislator allows for a certain margin of discretion in assessing the market rent, so not every (moderate) deviation of the agreed rent from the market rent (e.g. an interest rate of 6% instead of the market-typical 8%) leads to a lack of arm’s length principle.
Source: info.leitnerleitner.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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