What is income from venture capital companies?

Venture capital companies (Venture Capital Funds or Private Equity Funds) are playing an increasingly important role in off-market corporate financing. Shareholders who only contribute money receive a corresponding share of the profits. It is also agreed that the contribution of intangible services by the fund initiators, such as know-how, leads to a disproportionate share of profits (carried interest).

This increased profit share (carried interest) for shareholders of so-called venture capital funds is a special performance-related remuneration and is classified as income from self-employment.

• For companies newly established from 1 January 2009, carried interest is subject to the partial income procedure and is therefore only 60% taxable. Consequently, related expenses are 60% deductible.
• For companies established before 2009, the half-income procedure still applies, meaning that 50% of the profit is taxable and 50% of the expenses are deductible.

(2023): What is income from venture capital companies?