Valuation for Tax Purposes

When valuing an enterprise or intangible assets such as brands, patents or customer relationships for tax purposes some important aspects should be acknowledged


Effects of the duration of the valuation object

Regarding intangible assets the question of a terminal value i.e. a limited or unlimited lifetime has a deep impact on the value.

Importance of the discount rate

Due to increasing interest rates the discounting of the cash flows have again an important effect on the value. For developing the discount rate current information from standard setters such as the IDW should be taken into account. These need to be adjusted for intangible assets.


Importance of the documentation on the valuation

Valuations for tax purposes are often not discussed until the tax auditors audit the respective company. A concise and understandable documentation of the valuation is therefore very important.

Organization of the valuation for tax purposes

The valuation as well as the documentation should be in German language, if German tax authorities are to adressed. If the valution object needs to be valued also for other purposes different valuation methods and assumtions within the same method need to be considered.

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