How Does Germany Assess Self-Employed Parents’ Income for Child Support?

Question from SILE, How Does Germany Assess Self-Employed Parents’ Income for Child Support?

Answer from AI:

The statement is broadly correct, but several points require qualification under German law.

Applicable law and jurisdiction

The fact that the child lives in Germany is highly important, but it does not automatically mean that German law governs every aspect of the dispute. In cross-border maintenance cases, jurisdiction and applicable law are determined mainly by the EU Maintenance Regulation and the 2007 Hague Protocol. As a general rule, child-maintenance obligations are governed by the law of the child’s habitual residence, subject to specific exceptions. A German court may therefore apply German law where the child habitually resides in Germany, even if the parent works or owns a company in Switzerland. (eur-lex.europa.eu)

German courts normally assess child support under the Civil Code, including the parent’s actual and legally relevant financial capacity. Under § 1603 BGB, parents of minor children must use all available resources for the child’s support, subject to protection of their own necessary living needs. The child’s entitlement is not limited to the amount shown on a salary statement. (gesetze-im-internet.de)

Self-employment and company income

A self-employed parent or owner-manager cannot necessarily determine support solely by choosing a low salary. Courts may examine:

• business accounts, tax returns, and profit-and-loss statements;
• private withdrawals and benefits paid by the company;
• company-paid housing, vehicles, insurance, or other personal expenses;
• retained profits and dividend decisions;
• the parent’s role, working capacity, and normal remuneration for comparable work;
• whether expenses are commercially necessary or primarily designed to reduce support.

A Swiss GmbH or AG is legally separate from its shareholder. Consequently, company profits do not automatically become the parent’s personal income merely because the parent controls the company. However, if profits are deliberately retained, salary is unreasonably reduced, or company funds are used for personal purposes, a German family court may treat those facts as relevant to the parent’s available resources. In appropriate circumstances, the court may also attribute income that could reasonably be earned—often called “imputed” or “fictitious” income—if the parent is intentionally limiting earnings without a convincing business reason.

Large pension contributions are not automatically disregarded or accepted. Their treatment depends on whether they are reasonable, customary, genuinely paid, and compatible with the parent’s heightened duty toward a minor child. Contributions that appear excessive or timed to reduce support may receive limited credit.

Disclosure and evidence

Under § 1605 BGB, relatives in a direct line must provide information about income and assets when necessary to determine support, including supporting documents. In proceedings, § 235 FamFG permits the court to order disclosure and production of records; if information is incomplete, the court may seek relevant information from third parties, including tax authorities under § 236 FamFG. (gesetze-im-internet.de)

Cross-border evidence can involve Swiss accounting records, tax filings, pension documentation, shareholder resolutions, and bank information. Obtaining or interpreting those materials may require German and Swiss family-law counsel. Personalized advice is especially important before alleging concealment, requesting imputed income, or challenging corporate pension payments, because the result depends heavily on the company structure, the parent’s actual control, and the available evidence.