Shareholder Loans to a GmbH in Germany 2026: Interest Rates, Tax and Accounting

GmbH and UG founders often need to inject additional capital into their company after incorporation – for working capital, investments, or short-term liquidity. Instead of the costly route of increasing share capital, many shareholders opt for a shareholder loan (Gesellschafterdarlehen): they lend money directly to their own company. This is entirely legal and can be tax-efficient – as long as you follow the rules.

Key Takeaways

• A shareholder loan needs no notary and no commercial register entry – just a written agreement and clean bookkeeping.
• The interest rate must pass the arm's length test. Typical benchmark: around 4–8% per annum, depending on creditworthiness, term and collateral. There is no universally "safe" rate.
• Important for founders: anyone holding at least 10% of the GmbH is taxed on the interest at their personal income tax rate – not the 25% flat withholding tax (§ 32d Abs. 2 Nr. 1 b EStG).
• For the GmbH, the interest is a deductible business expense that reduces corporate income tax and trade tax.
• For a controlling shareholder, everything must be agreed in advance, clearly and in writing and actually carried out – otherwise you risk a hidden profit distribution.
• In insolvency, the loan is subordinated (§ 39 InsO) and often lost.

What Is a Shareholder Loan (Gesellschafterdarlehen)?

A shareholder loan is a loan granted by a shareholder to their GmbH or UG. The shareholder becomes a creditor with a legal claim to repayment. Unlike increasing share capital, no notary or commercial register entry is required – just a written loan agreement and proper bookkeeping.

The reverse direction is also possible: the GmbH lends money to the shareholder. This article covers the common case where the shareholder lends money to their own company.

Shareholder Loan, Capital Increase, or Additional Contribution?

Fresh capital can reach the GmbH in three ways. They differ in cost, flexibility and tax effect:

The main advantages of the shareholder loan: it can be repaid at any time, it is set up quickly and cheaply without a notary, and the interest reduces the GmbH's profit. It is ideal for short-term liquidity needs or financing individual projects.

Arm's Length Interest Rate

There is no universally safe rate

For 2026 there is no fixed prescribed interest rate for a shareholder loan. What matters is the arm's length principle (Fremdvergleichsgrundsatz): the tax office checks whether the agreed rate matches what an independent third party would charge under comparable conditions. Term, collateral, rank and the GmbH's creditworthiness all count.

A useful anchor is the statutory base rate under § 247 BGB, published semi-annually by the Bundesbank: since 1 July 2026 it stands at 1.52% (previously 1.27%). On top of that base comes a risk premium reflecting your company's creditworthiness and any collateral. In practice, arm's length rates for shareholder loans therefore usually fall in the 4–8% per annum range.

Document how the rate was derived – for example with a comparable quote from your bank or a reference to the base rate plus a premium. A rate that is too low (or zero) can be reclassified as a hidden profit distribution; so can an excessive rate, in which case the unreasonable portion of the interest counts as a hidden distribution.

Tax Treatment: GmbH and Shareholder

At the level of the GmbH

For the GmbH, the interest paid is a deductible business expense. It reduces taxable profit and therefore both corporate income tax (15% plus solidarity surcharge) and trade tax. This is exactly what makes the loan attractive compared with a profit distribution, which is paid out of already-taxed profit.

One limit is the interest barrier (Zinsschranke, § 4h EStG, § 8a KStG): it restricts the interest deduction only once net interest expense exceeds the €3 million threshold per year. For the vast majority of small and mid-sized GmbHs this is irrelevant.

At the level of the shareholder

This is where the most common mistake happens. Interest income is generally subject to the flat withholding tax (Abgeltungsteuer) of 25% plus solidarity surcharge (= 26.375%). For shareholder loans, however, there is a crucial exception: if the lending shareholder holds at least 10% of the GmbH, the interest is excluded from the flat tax and taxed at the personal, progressive income tax rate (up to 45% plus surcharge) – under § 32d Abs. 2 Nr. 1 b EStG. The same rule applies when a person closely related to the shareholder grants the loan.

In practice this means the typical founder who holds the majority or all shares is taxed on the interest at their personal rate. Whether the loan is cheaper overall than a profit distribution therefore depends on your individual tax rate.

If a corporation (for example a holding GmbH) holds the loan, the interest is fully taxable at its level – the 95% exemption of § 8b KStG applies only to dividends, not to interest.

Avoiding a Hidden Profit Distribution: the Agreement

For the tax office to accept the interest, the loan agreement must pass the arm's length test. The standard is especially strict for a controlling shareholder (usually a majority holding): here the terms must be agreed clearly, unambiguously and in advance and actually carried out. Retroactive or purely verbal arrangements are not recognised – the interest payments then count as a hidden profit distribution.

A robust loan agreement covers at least:

• Loan amount and disbursement date
• Interest rate and interest due dates (with a rationale for the rate)
• Term and repayment terms (amortising or bullet)
• Collateral, if agreed, and the ranking
• Date and signatures before the first disbursement

Note: the loan principal itself does not become a hidden distribution – repaying the capital is tax-neutral. What is treated as a hidden distribution is the interest payment (or, with an excessive rate, the unreasonable portion) when the agreement or its execution is not arm's length.

Bookkeeping and Balance Sheet Treatment

In the GmbH's bookkeeping, the shareholder loan appears on the liabilities side of the balance sheet as a liability to shareholders. Interest payments run through an interest expense account. Depending on the chart of accounts:

In the annual financial statements, liabilities to shareholders must be disclosed separately so that the rank and origin of the capital remain visible. A cleanly booked loan with proper interest accruals is also the best evidence that the agreement is actually being carried out.

Risk: Subordination and Clawback in Insolvency

Under § 39 (1) no. 5 InsO, shareholder loans are subordinated in the GmbH's insolvency: the shareholder is only repaid after all other creditors have been paid in full. In practice, the loan is often lost entirely.

There is a further catch: repayments the GmbH made in the final year before filing for insolvency can be contested by the insolvency administrator under § 135 InsO and clawed back. To avert over-indebtedness, the shareholder can agree a qualified subordination (Rangrücktritt) – the loan is then not counted as a liability in the over-indebtedness test (§ 19 InsO).

Frequently Asked Questions

How high can the interest on a shareholder loan be?

There is no fixed rate. It must be arm's length – typically around 4–8% per annum depending on creditworthiness, term and collateral. Both a rate that is too low and one that is excessive are risky, because either can trigger a hidden profit distribution.

Can a shareholder loan be interest-free?

Under civil law, yes. For tax purposes an interest-free loan can be problematic if an independent third party would have charged interest. When the GmbH is the borrower this is usually uncritical; the sensitive case is mainly when the GmbH lends money to a shareholder interest-free.

How is the interest taxed for the shareholder?

From a holding of 10% upward, at the personal income tax rate (up to 45% plus surcharge), not at the 25% flat withholding tax (§ 32d Abs. 2 Nr. 1 b EStG). Below 10%, the flat withholding tax of 25% plus surcharge applies.

Can a UG also take out a shareholder loan?

Yes. The UG (haftungsbeschränkt) follows the same rules as the GmbH. Because the UG often starts with very little share capital, the shareholder loan is a common financing tool there.

What happens to the loan in insolvency?

It is subordinated (§ 39 InsO) and serviced only after all other creditors – in practice usually without repayment. In addition, repayments made in the final year before the insolvency filing can be clawed back.

Conclusion

A shareholder loan is a flexible and tax-efficient way to finance your GmbH or UG – provided it is documented in writing and in advance, carries an arm's length interest rate, and is correctly accounted for. The decisive point is classifying the interest correctly: from a 10% holding onward, the personal tax rate applies, not the flat withholding tax. Norman helps you record shareholder loans accurately, post the interest to the right accounts, and keep your GmbH's books audit-ready.