On March 6, 2015, the amendments of the Regulation on the Investment of Restricted Assets of Insurance Undertakings (“Investment Regulation“) were published in the Federal Law Gazette (Bundesgesetzblatt). The amendments were necessary to adapt the Investment Regulation to the new fund regulation, which entered into effect following the transposition of the AIFM Directive.

On February 12, 2015, the German Federal Ministry of Finance published a Decree which clarifies unclear issues for closed end alternative investment funds set up as partnerships, so-called Investment Partnerships. In particular, the Decree clarifies which entities qualify as Investment Partnerships and are therefore tax transparent and also addresses uncertainties in relation to the filing requirements for such Investment Partnerships.

According to a judgement of the European Court of Justice (ECJ) the German lump-sum taxation of non-transparent foreign investment funds according to Sec. 6 GITA violates the free movement of capital (ECJ, decision dated 9 October 2014, “Van Caster” – C-326/12). This is because it is not possible for the investor itself to provide information to avoid such lump-sum taxation.

In a recent circular, the German Federal Ministry of Finance clarified the procedure that allows the investor to provide sufficient information in order to avoid lump-sum taxation. The requirements are very tough.