On 16 December 2016, the BaFin presented a draft of the circular relating to the investments of Solvency I insurers and pension funds for public consultation. The final version was recently published with only minor amendments compared to the draft. However, said amendments are important for private equity funds.

In the current financial year 2017, two fiscal courts confirmed the tax classification of distributions from a Luxembourg SICAV organized as a corporation as dividends under the DTT Luxembourg in the version valid until 2013. The Finance Administration has filed an appeal with the Federal Supreme Court against the judgment of the Finanzgericht Sachsen-Anhalt of 22 March 2017 (Ref. 3 K 383/16). The procedure is conducted there at the first senate under the Az. I R 61/17. The Dusseldorf Finance Court also approved possibility of an appeal in its judgment of 17 October 2017 (Case 6 K 1141/14).

When it comes to cross-border real estate investments, it may be advantageous to invest in the respective jurisdiction via a local investment fund instead of a traditional real estate company. Tax advantages abroad are often associated therewith. The Federal Financial Supervisory Authority has now issued a statement on whether the characteristic as an investment fund speaks against a simultaneous classification as a real estate company. Its unequivocal answer: there is no specialty of classification. Both classifications are possible at the same time. This is the most important statement of the draft letter and it is phrased briefly and to the point. The Federal Financial Supervisory Authority then deals extensively with the requirements for the classification as a real estate company.