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New German Investment Tax Act not yet voted - 26/07/2013


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Background

In light of the implementation of the AIFMD, a new German Kapitalanlagegesetzbuch (KAGB) has been voted recently. Coming into force as from 22 July 2013 in Germany, one comprehensive regulatory law will deal with all kind of investment vehicles.

Foreseen tax changes, related to the implementation into German law of the AIFMD, have been discussed intensively by the German Legislator. As the two houses (Bundestag and Bundesrat) could not come to an agreement, the commencement of the new Investment Tax Act has been postponed for an indefinite period of time. However, there is still the possibility that the law will be voted on early fall 2013.

Due to the delay, uncertainties arose especially regarding the question of which investment vehicles would be considered as investment funds for tax purposes and subject to the Investment Tax Act.

Transition Rules

The German Federal Tax Office (BMF) issued a circular on 18 July 2013 stating that the rules of the current German Investment Tax Act (InvTA) will be applicable for investment funds until a replacement law has been voted for and is in place.

Despite the fact that the current German Investment Act will be replaced by the new German KAGB as from 22 July 2013, the classification of investment vehicles as investment funds for German tax purposes, and therefore subject to tax reporting under the German Investment Fund Tax Reporting Regime, will be based on relevant rules of the current InvTA. This applies to investment vehicles that already exist but also to those that might be launched after 21 July 2013. This status will remain valid until the new Investment Tax Act comes into force.

If you have any queries regarding the above, please do not hesitate to contact us.  

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