The European Court of Justice (ECJ) published a decision on 10 April 2014 ruling that withholding tax on dividend distributions to funds located in non-EU countries may constitute a breach of the principle of free movement of capital if dividend distributions to comparable domestic investment funds are tax-exempt. Comparability does not demand an application of comparable regulations in the state of residence but the proof of a factual comparability with a domestic fund. In addition, the states involved must be bound by an obligation under a convention on mutual administrative assistance and exchange of information and thereby be in a position to verify any information that may be transmitted by the fund to prove comparability (ECJ, decision dated 10 April 2014, “Emerging Markets Series of DFA Investment Trust Company“ - C-190/12).

News from the regulatory world include two innovations and one standstill: On 27 March 2014, the European Commission presented its proposal for a revision of the Institutions for Occupational Retirement Provision Directive. On 1 April 2014, the European Parliament and the European Council agreed upon the key issues regarding the realization of the PRIPs initiative; endowment life insurance contracts are finally within the scope of application. The revision of the Investment Ordinance for German insurance companies does not make any progress.

Repayments from the contribution account for tax purposes (sec. 27 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 regulation does not include any rules for repayments from companies established in non-EU countries. The Finance Court Nürnberg decided that repayments of capital commitments from companies established in non-EU countries can be received free of tax if the respective national law qualifies those payments as repayments of capital contributions.