Shortly after the French anti-abuse rule for the Parent-Subsidiary-Directive was declared void because it was contrary to European law, the German rule is next. In the joined cases C-504/16 (Deister Holding) and C-613/16 (Juhler Holding), the European Court of Justice decided that the anti-abuse rule of Section 50d (3) German Income Tax Act in the version of 2007 violates both the Parent-Subsidiary-Directive and the freedom of establishment. Even though the judgement is only applicable for cases until the assessment year 2011, there are substantial doubts that the new version which is valid since 2012 is in line with European law. This question is indeed already on the table of the European Court of Justice (ECJ C-440/17).
In light of the ECJ ruling in "Fiscale Eenheid X", Germany has amended the scope of the VAT exemption for management services of investment funds. As of January 1, 2018 the management of UCITS within the meaning of Sec. 1 para. 2 of the German Capital Investment Code as well as the management of alternative investment funds, which are comparable to UCITS within the meaning of Sec. 1 para. 3 of the German Capital Investment Code, are exempt from German VAT. In particular, the German Federal Ministry of Finance has issued an interpreting decree on December 13, 2017 with regard to the question as to what is meant by alternative investment funds which are comparable to UCITS. Furthermore, in 2017, the German Federal Ministry of Finance also issued new interpreting guidelines regarding the question of services in connection with German real estate. Our Client Newsletter dated February 6, 2018 provides examples and shows particular consequences arising for funds investing in German real estate.
On 21 December, 2017, the German Federal Financial Supervisory Authority ("BaFin") published a guidance paper setting forth the BaFin's view with regard to the assignment of responsibilities of the AIF and the AIFM. Following a public consultation in early 2017, the BaFin has now clarified which duties and responsibilities will be undertaken by the AIFM, which remain with the AIF and which can be delegated in the name and on behalf of the AIF.
