Skip to content

Determining a repayment of contributions (§ 27(8) KStG)

A repayment of contributions can also be made by corporations or associations NOT subject to unlimited German tax liability, where they are able to make payments within § 20(1) nos. 1 or 9 EStG (§ 27(8) sentence 1 KStG). The amount treated as a repayment of contributions is, however, determined separately only ON APPLICATION by that body, for the financial year concerned (sentence 3), and the application must be made on the officially prescribed form BY THE END OF THE TWELFTH MONTH following the end of the financial year in which the payment was made (sentence 4). Where no separate determination is made, the payments count as a DISTRIBUTION OF PROFITS giving the shareholder income within § 20(1) nos. 1 or 9 EStG (sentence 9).

Up to date for 2026 — verified on September 23, 2026Official procedure, no printed formGuide: about 45 min

This content is part of the path: Taxing a GmbH and distributing profits· Step 10 of 10· Last step of the path

Deadlines

Application: by the end of the TWELFTH month after the end of the financial year in which the payment was made
§ 27(8) sentence 4 KStG — on the officially prescribed form
Missing it is not a penalty but a RECHARACTERISATION
To the extent no repayment of contributions has been separately determined, the payments count as a distribution in the shareholder's hands (§ 27(8) sentence 9 KStG)
For a German corporation: a return as at the end of EVERY financial year
§ 27(2) sentence 4 KStG — there the determination is the rule, not an application
Certificate: by notification of the first determination as at the end of the financial year of the payment
After that the amount counts as certified at 0 euros, and a first issue is NO LONGER permissible (§ 27(5) sentences 2 and 3 KStG)

Documents to prepare

  • ELSTER access with a certificate or an ELSTER business account
  • The tax balance sheet as at the end of the previous financial year
  • Subscribed capital and the balance of the tax contribution account
  • The computation of distributable profit under § 27(1) sentence 5 KStG
  • Date, amount and nature of each payment in the financial year
  • A list of shareholders with names, addresses and holdings
  • An account of the circumstances needed for the computation
  • The competent authority's file reference, for the certificates
See the procedure on the official site

No form is attached to this procedure: the link leads to the official page that describes it.

What this page gives you

The guide above and the link to the official site. ActioFin does not produce any document for this page: whatever you fill in or file is done on the official medium.

Who this applies to

  • Corporations and associations WITHOUT unlimited German tax liability that are able to make payments within § 20(1) nos. 1 or 9 EStG (§ 27(8) sentence 1 KStG) — they are the applicants, not their shareholders
  • Indirectly, any German-taxable SHAREHOLDER of such a company: if no application is made, the repayment is taxed in their hands as a distribution (§ 27(8) sentence 9 KStG)
  • NOT this route for a corporation with unlimited German tax liability: its tax contribution account is determined separately every year anyway, and it must file a return as at the end of each financial year (§ 27(2) sentences 1 and 4 KStG)
  • Applying correspondingly to other corporations and associations with unlimited liability that can make payments within § 20(1) nos. 1, 9 or 10 EStG (§ 27(7) KStG)
  • Anyone wanting a payment treated as a repayment of contributions must accept the order of priority: payments reduce the contribution account only TO THE EXTENT they EXCEED the distributable profit at the end of the previous year (§ 27(1) sentence 3 KStG)
  • Competence comes in two cases: the office locally competent for income taxation under § 20 AO, and where none is competent, the Federal Central Tax Office (§ 27(8) sentences 5 and 6 KStG)

Worked example

A company without unlimited German tax liability repays capital to its shareholders in 2026

The company makes a payment in June 2026 which it regards as a repayment of earlier contributions. Its financial year matches the calendar year. For that payment to be treated as a repayment of contributions for tax purposes, intention is not enough: the amount is determined separately only ON APPLICATION, for the financial year concerned (§ 27(8) sentence 3 KStG), and the application is due by the end of the twelfth month after the end of that financial year (sentence 4) — so by the end of December 2027. The computation itself follows the corresponding application of subsections 1 to 6 and §§ 28 and 29 (sentence 2), and the decisive order of priority sits in subsection 1 sentence 3: payments reduce the tax contribution account, REGARDLESS OF THEIR TREATMENT UNDER COMPANY LAW, only TO THE EXTENT they EXCEED the distributable profit determined at the end of the previous financial year. Distributable profit is defined as the equity shown in the tax balance sheet less the subscribed capital and less the balance of the tax contribution account (sentence 5). Whatever the shareholders call a 'capital repayment resolution' at home changes none of that. If the application is not made, the consequence is not a fine but a recharacterisation: to the extent a repayment of contributions has not been separately determined, the payments count as a distribution of profits giving the shareholder income within § 20(1) nos. 1 or 9 EStG (§ 27(8) sentence 9 KStG). The German-taxable shareholder then pays tax on a distribution that was economically their own capital.

How to fill it in, step by step

  1. Establish whether the company falls within the provision at all: no unlimited German tax liability, but the ability to make payments within § 20(1) nos. 1 or 9 EStG (§ 27(8) sentence 1 KStG).
  2. Identify the financial year of the payment — the twelve-month period runs from its end (§ 27(8) sentence 4 KStG).
  3. Compute the distributable profit as at the end of the PREVIOUS financial year: equity in the tax balance sheet, less subscribed capital, less the balance of the tax contribution account (§ 27(1) sentence 5 KStG).
  4. Determine which part of the payment EXCEEDS that distributable profit — only that part reduces the contribution account (§ 27(1) sentence 3 KStG).
  5. Note the floor: the balance of the tax contribution account cannot be made negative by payments (§ 27(1) sentence 4 KStG).
  6. Identify the competent authority: the office locally competent for income taxation under § 20 AO, failing which the Federal Central Tax Office (§ 27(8) sentences 5 and 6 KStG).
  7. Log in to Mein ELSTER and select the application for determination of a repayment of contributions; set out in it the circumstances needed for the computation (§ 27(8) sentence 7 KStG).
  8. Issue shareholders the certificate on the officially prescribed form with name and address, amount and payment date (§ 27(3) sentence 1 KStG), and include the FILE REFERENCE of the competent authority (§ 27(8) sentence 8 KStG).
  9. Do so in time: if no certificate has been issued by notification of the first determination, the amount counts as certified at 0 euros, and a first issue is no longer permissible thereafter (§ 27(5) sentences 2 and 3 KStG).

Good to know

  • The order of priority is mandatory and not a matter of choice: payments reduce the tax contribution account only TO THE EXTENT they exceed the distributable profit — and that REGARDLESS of their treatment under company law (§ 27(1) sentence 3 KStG).
  • Distributable profit is defined, not estimated: the equity shown in the tax balance sheet less subscribed capital and less the balance of the tax contribution account (§ 27(1) sentence 5 KStG).
  • A reduction certified TOO LOW stands — the use underlying the certificate is fixed (§ 27(5) sentence 1 KStG), and correction is not permissible in that case (sentence 3).
  • A repayment shown TOO HIGH is treated differently: the capital gains tax on the excess is to be asserted by a LIABILITY NOTICE, and the tax certificates may be corrected (§ 27(5) sentences 4 and 5 KStG).
  • The determination for the year of the payment is ADJUSTED to the repayment underlying that liability (§ 27(5) sentence 6 KStG).
  • The certificate need not be signed where it is printed by an automated process and identifies the issuer (§ 27(3) sentence 2 KStG).
  • For a German corporation the determination notice is a BASIS NOTICE for the determination at the following date (§ 27(2) sentence 2 KStG) — a chain in which an error carries forward.
  • For the foreign variant the certificate must include the file reference of the authority competent under § 27(8) sentences 5 or 6 KStG (sentence 8) — without a determination there is therefore no file reference either.

Common mistakes

  • Assuming a shareholders' resolution on a capital repayment is enough. Without a separate determination ON APPLICATION the payments count as a distribution (§ 27(8) sentences 3 and 9 KStG).
  • Counting the twelve months from the PAYMENT. They run from the end of the FINANCIAL YEAR in which the payment was made (§ 27(8) sentence 4 KStG).
  • Treating the company-law characterisation as decisive. § 27(1) sentence 3 KStG expressly states that it is not.
  • Using the CURRENT year's distributable profit. What counts is the figure determined at the end of the PREVIOUS financial year (§ 27(1) sentence 3 KStG).
  • Trying to issue the certificate late. If none has been issued by notification of the first determination, the amount counts as certified at 0 euros and a first issue is not permissible (§ 27(5) sentences 2 and 3 KStG).
  • Trying to correct a reduction certified too low. The use underlying the certificate stands (§ 27(5) sentence 1 KStG).
  • Letting the contribution account go negative. Its balance cannot be made negative by payments (§ 27(1) sentence 4 KStG).
  • Filing this application as a German corporation. There the balance is determined separately every year anyway and a return must be filed (§ 27(2) sentences 1 and 4 KStG).

Frequently asked questions

Who makes the application?

The corporation or association itself. The amount to be treated as a repayment of contributions is determined separately on the application of the corporation or association for the financial year concerned (§ 27(8) sentence 3 KStG).

By when?

By the end of the twelfth month following the end of the financial year in which the payment was made, on the officially prescribed form (§ 27(8) sentence 4 KStG).

What happens if no application is made?

To the extent no repayment of contributions has been separately determined for payments or repayments of nominal capital, they count as a distribution of profits giving the shareholder income within § 20(1) nos. 1 or 9 EStG (§ 27(8) sentence 9 KStG).

Which part of a payment is a repayment of contributions at all?

Only the part exceeding the distributable profit determined at the end of the previous financial year — regardless of the treatment under company law (§ 27(1) sentence 3 KStG).

Which authority is competent?

The tax authority locally competent for income taxation under § 20 AO at the time the application is filed; where no authority is competent, the Federal Central Tax Office (§ 27(8) sentences 5 and 6 KStG).

Can I issue a forgotten certificate later?

No. If no tax certificate has been issued by the day of notification of the first determination as at the end of the financial year of the payment, the amount of the repayment counts as certified at 0 euros, and correction or first issue is not permissible (§ 27(5) sentences 2 and 3 KStG).

Go further

Compute the related amounts

Understand this form: the related course

Related forms

Official sources

Read in German

Guide and document provided for information purposes only; they do not constitute personalised legal or tax advice. Check the recipient organisation's requirements and consult a professional if needed.