In spring, many companies, including investment companies, are planning their ordinary shareholders' meeting. The safety measures taken in order to avoid a spreading of the COVID-19 pandemic, especially restrictions on gatherings of people, partly have significant effects on the ability of companies of various legal forms to act. Companies are now often no longer able to make decisions at relevant meetings in the usual way. On the one hand, this applies to ordinary meetings, which usually take place annually and are often used to approve the annual financial statements and to determine the distribution of profits, and, on the other hand, to extraordinary meetings that are necessary due to special measures, in particular for corporate actions and restructuring. Companies that, according to their constituting documents, do not have the possibility to hold their shareholders' meetings by written proceedings, audio conference or video conference, must now face the problem of holding the upcoming shareholders' meetings despite social distancing or lockdowns.

On December 10, 2019, the German Ministry of Finance published a first draft of a reform of its controlled foreign corporation (CFC) taxation. Even though Germany had already implemented CFC taxation in 1972, a reform was necessary because the existing legislation is not in line with the requirements of the Anti-Tax-Avoidance Directive (ATAD) of the European Union in every aspect. At first glance, the proposed amendments look rather minor, but after a closer look it becomes evident that the reform has the potential to significantly increase compliance requirements, in particular for German investors in investment funds.

The European Court of Justice ruled (ECJ 13 November 2019 – C-641/17) that the definitive withholding tax levied on German dividends received by foreign pension funds infringes the principle of the free movement of capital (Article 63 of the Treaty on the Functioning of the European Union), provided that the foreign pension fund is in an objectively comparable situation as a domestic pension fund (Pensionsfonds). This is the case if a foreign pension fund allocates the received dividends either pursuant to the law in force in the state of residence or on a voluntary basis to its reserves for pension payment obligations. In this beinformed we explain the background as well as the practical implications of the ruling and who may benefit therefrom. We are happy to assist your Tax Department to reclaim your German WHT.