Germany's Wegzugsteuer and Dubai: Why the Company Valuation Decides Everything

By Bill Anderson, FCCA, Chief Executive Officer, Assetica — 2026-07-09

Direct Answer: If you hold 1 percent or more of a corporation (typically a GmbH) and move your tax residence from Germany to Dubai, section 6 of the Aussensteuergesetz (the Wegzugsteuer) treats your shares as sold at fair market value on the day you leave, and taxes the fictitious gain even though no money changed hands. Because the old Germany-UAE double tax treaty lapsed, there is no treaty shelter, and since the 2022 tightening the tax is generally due rather than indefinitely deferred, with instalment options against security and relief if you return within the statutory window. The entire charge runs off one input: the market value of your company on the departure date. The tax office's standardised earnings-multiple formula often overstates that value; a defensible independent valuation frequently produces a lower, more accurate number, and it must match the value used on the UAE side for your Golden Visa or holding structure.

German founders discover the Wegzugsteuer late and in the worst way: after the flight is booked. The rule is old, the 2022 version is stricter, and Dubai is its most common destination case. What almost nobody explains is that the valuation is the lever, because the law taxes a number, and the number is arguable.

How the deemed sale works

Section 6 AStG applies when an individual who has been subject to unlimited German tax liability for at least seven of the last twelve years moves away holding at least 1 percent of a corporation acquired within the meaning of section 17 EStG. Departure triggers a fictitious disposal at fair market value; the gain over your acquisition cost is taxed under the partial income method, so roughly 60 percent of the gain at your personal rate. No buyer, no proceeds, real tax. Since 2022 the charge is assessed immediately for moves to any country, EU or not; payment can be spread over seven annual instalments, normally against security, and the charge can fall away if you return within the statutory return window and meet its conditions.

No treaty shelter on the Dubai route

Germany's double tax treaty with the UAE was allowed to lapse, so there is no treaty allocation of taxing rights to soften the exit. That cuts both ways: the Wegzugsteuer applies with full force, and later German taxation of UAE-sourced income follows domestic law alone. Planning therefore happens on the German side before departure: the timing of the move, the structure of the holding, and above all the value that will be assessed.

Why the valuation is the lever

Where no recent arm's length sale exists, the tax office defaults to the standardised earnings-based method (the vereinfachtes Ertragswertverfahren), which capitalises average past earnings with a fixed multiplier. For young, volatile or asset-light businesses that formula routinely overstates value: it looks backwards at three good years, ignores customer concentration and owner dependence, and applies a one-size multiplier the market would never pay. The law allows a different value to be demonstrated by an accepted valuation method, which is exactly where an independent, IDW S1 and IVS-consistent valuation earns its fee: normalised earnings, a defensible discount rate, and documented company-specific risks can support a materially lower fair market value than the formula, and every euro of value removed reduces the fictitious gain. The same discipline protects you in the other direction if the office tries to inflate a lowball self-assessment.

Keeping the German and UAE numbers consistent

The value assessed for the Wegzugsteuer does not live in isolation. If you take the UAE Golden Visa business route, the GDRFA needs an independent report confirming your stake is worth at least AED 2 million, roughly EUR 500,000. If you restructure into a UAE holding, the UAE Federal Tax Authority expects arm's length values. A German exit file that says one number and a Dubai visa file that says a very different one for the same company on the same dates is an avoidable own goal. One valuation exercise, one date, one methodology, formatted for the Finanzamt and for the GDRFA, keeps the story straight, which is what our Europe to UAE valuation service is built for, alongside our broader Europe to Dubai relocation guide.

Before you book the flight

Model the charge on a realistic valuation before fixing the departure date; the difference between the formula value and a defended value is often the difference between feasible and not. Consider the instalment route and what security the office will want. Understand the return-window relief if the move might not be permanent. And put the valuation evidence together while you are still in Germany, with clean accounts and management information, rather than reconstructing it from Dubai under assessment pressure. Our guide to valuation standards in Europe covers what a report that survives scrutiny contains.

Frequently Asked Questions

Who is caught by the Wegzugsteuer?

Individuals who were subject to unlimited German tax liability for at least seven of the last twelve years and hold at least 1 percent of a corporation (GmbH, AG or comparable foreign company) when they move their residence out of Germany. Sole proprietorships and partnership interests follow different rules; the classic case is the GmbH founder.

Can the tax be deferred?

Since the 2022 reform the charge is assessed on departure for all destinations, with payment spreadable over seven annual instalments, normally against security. If you return to Germany within the statutory window and meet the conditions, the charge can fall away retroactively. The old unlimited EU deferral is gone.

How is the company valued if there was no sale?

The default is the standardised earnings method, which capitalises past average earnings with a fixed multiplier. A taxpayer may instead demonstrate fair market value through an accepted valuation method, and an independent IDW S1 and IVS-consistent report with normalised earnings and documented risks frequently supports a lower, more accurate value than the formula.

Does the lapsed Germany-UAE treaty change anything?

Yes: there is no treaty relief on the Dubai route, so the Wegzugsteuer applies with full force and later cross-border questions are settled by domestic law. Planning happens before departure, on the German side, with the valuation as the main variable you can actually influence.

Can the same valuation serve the Golden Visa?

The underlying value can. The GDRFA needs its own format: an independent report isolating your stake, net of debt, against the AED 2 million threshold. Assetica prepares the German-side evidence and the GDRFA report from one valuation date and methodology so the two files agree.

This article is general information for German founders relocating to the UAE, not tax or legal advice. Section 6 AStG, instalment and return rules change and individual facts decide outcomes; confirm current requirements with your Steuerberater before acting.

Frequently Asked Questions

Speak to Assetica about Business Valuation

Assetica is an independent business valuation firm in Dubai. We do not audit and we do not broker deals, so the number carries no conflict. Read more about business valuation, or book a scoping call. Standard reports are issued in five to seven business days.

Related Guides

• European Business Owners Relocating to Dubai: How Your Business Is Valued
• Business Valuation in Europe: IVS Standards and Cross-Border Deals
• UAE Golden Visa Business Valuation: The AED 2 Million Share Test
• Moving from Australia to Dubai: How Your Business Is Valued for Tax and Residency
• Dubai vs London vs Riyadh: Where the Same Business Is Worth the Most in 2026