On 24 November 2016, the OECD published its multilateral instrument on BEPS (MLI) together with an explanatory statement. In the following beinformed we provide a short overview highlighting the points we consider to be of particular interest for the investment management industry.

Repay­ments from the contri­bution account for tax purposes (sec. 7 of the German Cor­porate Tax Act) can be received tax-neutral at the investor's level if the require­ments of sec. 27 of the German Corporate Tax Act are met. This provi­sion does not include any rules for repay­ments from companies established in non-EU countries. The German Supreme Tax Court now confirms the view of the Finance Court of Nürnberg that repay­ments of capital from companies established in non-EU countries can be recog­nized as a tax neutral trans­action if the respec­tive national law quali­fies those pay­ments as repay­ments of previously contri­buted capital.

Under German invest­ment law, it is possible to set up a contrac­tual fund vehicle under the co-owner­ship prin­ciple. The Fiscal Court of Cologne held that the contri­bution of real estate by a single investor in such a fund vehicle does not trigger real estate transfer taxes if such fund is set up under the co-owner­ship principle. However, fiscal autho­rities have appealed and the Federal Tax Court, Germany´s highest tax court, will now have to decide.