Loan agreements between a corporation and its shareholders or persons closely related to shareholders must be sufficiently clear and at arm's length from the very beginning. If this is not the case (e.g., no written agreement regarding the granting of loans, lack of collaterals for a loan, insignificant minimum repayment, no possibility to terminate the loan agreement in case of a duration of more than ten years, no fixed threshold of the loan granted), a hidden disribution to the shareholder including all tax related (negative) consequences (e.g. nondeductibility of interest payments and therefore 25% Corporate Income Tax on the amount of interest paid) is to be assumed with respect to the amounts granted.

The Federal Fiscal Court (Bundesfinanzgericht, "BFG") clarified in this regard that the relevant criteria must have existed already at the point in time from which the loan agreement shall become effective. Retroactive agreements are not to be considered (BFG 5 May 2014, RV/6100388/2009).