Value a company
What is your company
worth today?
ow much your company is worth, I estimate for you here with the simplified capitalised-earnings method (§§ 199-203 BewG) - from the average of your last three Betriebsergebnisse, capitalised with the statutory fixed factor 13.75. I deduct the reasonable Unternehmerlohn, and the Verschonung relief for passing the business to the next generation (§ 13a/b ErbStG) is built in as an option. That gives you a first solid reference point before we go into the detail.
That is the company value a sustainable annual earnings figure of EUR 100,000 produces - capitalised with the statutory fixed factor 13.75.
§ 203 BewG
Honestly: This number frightens most owners at first - the tax office calculates with the fixed factor 13.75, and you quickly reach figures in the millions. But for the handover to the next generation that is only the starting value. Qualifying Betriebsvermögen stays 85 percent tax-free (Regelverschonung, § 13a ErbStG), on application even 100 percent. The valuation says what we are talking about - the structuring decides what is left at the end.
Company details
Estimated company value
Enter the operating profit of the last three years to estimate the company value using the simplified capitalised-earnings method.
Note: This estimate is a first indication and can differ substantially from the result of an individual appraisal. The simplified method is only admissible where it does not lead to obviously incorrect results (§ 199 BewG). Sector multiples, hidden reserves, non-operating assets and the Substanzwert as a floor are not reflected here. The tax office's assessment notice is decisive for the tax. For a reliable valuation please consult a German tax adviser.
Example
From result to value
Operating results 280,000 / 300,000 / 320,000 EUR, owner's salary 120,000 EUR. See for yourself how the fixed factor 13.75 quickly turns a solid annual result into a value in the millions - and how much of it the Verschonung relief takes back off at the end.
| Step | Amount |
|---|---|
| Average of the 3 operating results§ 201 para. 2 BewG | 300,000 EUR |
| less reasonable Unternehmerlohn§ 202 para. 1 BewG | − 120,000 EUR |
| less 30 % flat deduction = annual earnings§ 202 para. 3 BewG | 126,000 EUR |
| × capitalisation factor 13.75 = company value§ 203 · § 200 BewG | 1,732,500 EUR |
| taxable under standard relief (85 %)§ 13a ErbStG | 259,875 EUR |
Worked example, as of 2026. Capitalisation factor 13.75 (§ 203 BewG). The Substanzwert floor (§ 11 para. 2 BewG) is not reflected here. Figures rounded.
My tip from practice
The most common expensive mistake in company valuation: taking the value the simplified method spits out at face value. But the law itself draws a line - where the method leads to obviously incorrect results, it does not apply (§ 199 BewG). With fluctuating earnings or large hidden reserves an individual valuation report is often the better and lower value. And on the relief: anyone who breaches the Lohnsumme (payroll rule) or sells the business before the Behaltensfrist (holding period) expires loses the 85 percent retroactively (§ 13a ErbStG). Both belong on the table before the Feststellungsbescheid (assessment notice) becomes final.
Florian Enders, Tax Adviser · § 199 BewG
Frequent questions
Understanding company valuation
How is the company value calculated under the simplified capitalised-earnings method?
The simplified capitalised-earnings method (vereinfachtes Ertragswertverfahren, §§ 199-203 BewG) derives the value from the sustainably achievable annual earnings. The basis is the average of the Betriebsergebnisse (operating results) of the last three completed financial years (§ 201 para. 2 BewG). This result is adjusted - for example by deducting a reasonable Unternehmerlohn (owner's salary, § 202 para. 1 BewG) - and reduced by a flat 30 % for income taxes (§ 202 para. 3 BewG). The resulting annual earnings figure is multiplied by the capitalisation factor 13.75 (§ 203 in conjunction with § 200 BewG). The result is the Ertragswert (earnings value).
What is the capitalisation factor and why exactly 13.75?
The capitalisation factor translates the annual earnings into a company value. In § 203 BewG it has been fixed by law at 13.75 since 2016. Before that the factor was variable and tied to the Basiszins (base rate) of the Deutsche Bundesbank - during the low-interest years this produced absurdly high values, which is why the legislator introduced the fixed factor. Anyone still calculating with a variable Basiszins today is wrong. Annual earnings of EUR 100,000 therefore produce an Ertragswert of EUR 1,375,000.
Which owner's salary is deducted?
For owner-managed companies in which the owner works but no market-standard managing-director salary is booked, a reasonable Unternehmerlohn (owner's salary) is deducted from the operating result (§ 202 para. 1 no. 2 lit. d BewG). This prevents the owner's unpaid work from artificially inflating the earnings and therefore the value. If a market-standard salary is already in the result, the field stays empty.
How much tax arises when passing the business to the next generation?
When Betriebsvermögen (business assets) is inherited or gifted, begünstigtes Vermögen (qualifying assets) stays 85 % tax-free (Regelverschonung, standard relief, § 13a para. 1 ErbStG) or, on application, even 100 % (Optionsverschonung, optional relief, § 13a para. 10 ErbStG). Conditions include compliance with the Lohnsummenregelung (payroll rule) and a Behaltensfrist (holding period) of five or seven years. The relief only applies to qualifying assets (§ 13b ErbStG), not to Verwaltungsvermögen (administrative assets). From an acquisition of EUR 26 million special rules apply.
Is the simplified method always applicable?
No. The simplified capitalised-earnings method is only permitted where it does not lead to obviously incorrect results (§ 199 BewG). Industry-standard multiples, fluctuating earnings, large hidden reserves or assets not required for operations can make an individual valuation report necessary. In addition the Substanzwert (net asset value) is the floor: if the Ertragswert falls below it, the higher Substanzwert applies (§ 11 para. 2 sentence 3 BewG). The decisive figure for the tax is ultimately the Feststellungsbescheid (assessment notice) of the tax office.
Keep calculating
Matching calculators
Once you have the value, these are the two calculators I would reach for next if I were in your shoes.
Holding Calculator
You now know the value. On a sale the structure decides the tax: a direct sale versus a sale through a holding (§ 8b KStG) - compare instantly.
Open the calculatorNießbrauch Calculator
Transfer shares during your lifetime, keep the income, save tax - the capital value of the Nießbrauch (usufruct) at a glance.
Open the calculatorMore than a calculator.
Real advice.
An estimate is the start. What your company really costs on a sale or a handover depends on the Substanzwert, the Verschonung relief and the structure. Bring your figures along and I will place your case in context in the initial consultation, and together we find the route with the lowest tax burden.