In a recent decision, the German Federal Fiscal Court clarified that the procedure to avoid lump-sum taxation according to sec. 6 of the German Investment Tax Act (GITA) is applicable not only to EU and EEA funds, but also to funds from non-EU countries. In order to avoid lump-sum taxation, the investor is required to provide sufficient information and proof of the tax data according to sec. 5 para 1 GITA. Contrary to the opinion of the fiscal authorities, the court decided that the so-called 'stand-still' clause of Art. 64 TFEU is not applicable and thus sec. 6 GITA may violate the principle of the free movement of capital in the case of a non-EU fund (in this case: a US fund).
The legislator finally decided that open-ended special AIF under the German Investment Code are not barred from restructuring and prolongating loans.
On December 16, 2015, the German Ministry of Finance published the draft law on the reform of the German Investment Tax Act (the "Draft"). This commencement of the legislative process follows a six-month discussion with the German investment industry about an initial draft version already published in June 2015. The Draft reflects, inter alia, comments and remarks of various associations of the German financial industry as well as those raised from certain European investment management organizations. The legislative process is expected to be almost finalized by mid of this year.
You can find the draft law on the reform of the German Investment Tax Act (Investmentsteuergesetz) in our web-based version of the German Investment Tax Act. It is now available online. It highlights the changes and allows you to navigate through the legislative history.
