Capital contribution principle
Under the capital contribution principle, the repayment of contributions, premiums and additional payments by shareholders is exempt from income tax for the recipient and not subject to withholding tax, provided it is booked in a separate reserve from capital contributions and reported to the tax administration.
Definition
The difference from a dividend is considerable: a dividend is taxable for the recipient and subject to withholding tax, the repayment of a capital contribution is not. The condition is separate booking and reporting — without both, the distribution counts as taxable income.
For listed companies there is an additional rule linking distributions from capital contribution reserves to dividends. For an SME it is above all the separate booking that decides.
Where to read it
What the software must be able to do
In practice: the reserve from capital contributions needs its own account and must not disappear into the general reserves. Whoever has mixed them once has lost the evidence.
Checked Aug 2026
More terms under Company taxes: Anticipatory tax (Verrechnungssteuer) Capital tax Direct federal tax Dividend Profit tax