The draft bill of the German Federal Ministry of Finance encloses both mandatory and additional measures. First of all, the implementation of the EU directive on the cross-border distribution of undertakings for collective investment (keyword: pre-marketing) and the implementation of two EU directives on sustainability are mandatory. Here, Germany is ahead of the game, at least in terms of time. Additional information is provided on the topic of strengthening Germany as a financial center. The phrasing of this goal alone makes the hearts of the fund industry beat faster; it has been a long time since they have been flattered by the government. The draft bill actually contains measures for a new open mutual fund: right after the real estate fund, the infrastructure fund is launched in a new subsection 6. There is also something for special AIFs: Section 139 of the German Investment Code gets another sentence and professional investors get a closed special AIF in the legal form of a special fund. In addition, a few details: shareholder loans in 100 percent real estate companies, further competences of the German Financial Supervisory Authority, closed master-feeder-structures for private investors and digital communication. In terms of taxation, there are new regulations for employee shareholdings in "start-ups" and a VAT exemption for administrative services for "venture capital funds". We would like to present the most important draft laws in more detail.

The Fiscal Court of Berlin-Brandenburg has ruled in its decision from November 2 st, 2019, that a corporation having its place of business management located outside of Germany can create a per- manent establishment in Germany, solely by providing a German tax resident property management company with extensive management responsibilities. Even if this ruling discusses the rare case of a corporation which has its registered seat domestically but its place of management abroad at the domicile of its managing director, the consequences of this ruling can be applied to cases, where entirely non-domestic companies hand over management responsibilities to German tax resident management companies. This ruling is especially relevant for common inbound real estate structures using non-domestic companies to hold interest in domestic real estate.

After the Federal Ministry of Finance already discussed a first partial draft with the associations in December 2019, last week a new partial draft for the long-awaited amendment to the Circular on the German Investment Tax Act of May 21, 2019, was sent for consultation to the associations. The amendment is intended in particular to clarify questions in connection with the regulations for special investment funds (Chapter 3). We highlight some particularly important aspects of the new draft in our beinformed.