Share Deal vs. Asset Deal – Tax Differences Explained Simply

Same price, very different outcome

When selling a company, owners often focus on valuation and buyer fit. But one structural decision can change your net proceeds by hundreds of thousands or even millions:

Share Deal or Asset Deal?

While buyers and sellers may agree on the price, their tax interests are often directly opposed.

1. What is a Share Deal?

In a Share Deal, the buyer acquires the shares of the company.

• Legal entity remains unchanged

• Contracts, employees and licenses stay in place

• Seller sells shares (GmbH / AG / Ltd.)

Tax impact for the seller

• Private individual: Capital gains taxation (often partial-income method)

• Holding company: ~95% tax-exempt (only ~1–2% effective tax)

👉 Almost always the preferred structure for sellers

2. What is an Asset Deal?

In an Asset Deal, the buyer purchases individual assets and liabilities:

• Customers, machines, IP, inventory

• Selected liabilities (if any)

• Legal entity usually remains with the seller

Tax impact for the seller

• Sale proceeds are taxed inside the company

• Subsequent distribution to the shareholder is taxed again

• Leads to economic double taxation

👉 Often significantly worse for sellers

3. Why buyers often prefer Asset Deals

From a buyer’s perspective, Asset Deals offer advantages:

• Step-up in asset values → higher depreciation

• Reduced legacy risks (old liabilities, tax risks)

• Selective acquisition (leave risks behind)

👉 Buyers frequently push for Asset Deals — even at the same headline price.

4. Real-world tax comparison (simplified)

Assumptions:

• Sale price: €5.0m

• Book value of assets: €1.5m

Share Deal (private seller)

• Tax: ~€1.2–1.4m

• Net: ~€3.6–3.8m

Asset Deal

• Corporate tax on gain

• Dividend tax on distribution

• Net often: €2.8–3.1m

👉 Difference: €500k–1.0m at identical purchase price.

5. Negotiation reality: structure is part of the price

Experienced sellers understand:

• Asset Deal ≠ Share Deal

• Different tax outcomes require price adjustments

Common solutions:

• Higher purchase price for Asset Deals

• Hybrid structures

• Tax indemnities or earn-outs

Structure and price are inseparable.

6. When an Asset Deal can still make sense for sellers

In rare cases:

• High-risk legacy liabilities

• Distressed situations

• Partial exits or carve-outs

But even then, the tax impact must be calculated upfront.

Conclusion

A Share Deal and an Asset Deal may look identical on paper — but they are economically worlds apart.

For sellers, the Share Deal is usually superior. For buyers, the Asset Deal is often more attractive.

The optimal outcome is not about ideology, but about understanding the tax mechanics and negotiating accordingly.