In a recently published decision, the German Federal Fiscal Court (BFH) ruled in a preliminary proceeding that the German thin cap regulations (“Interest Barrier Rule“) may violate the principles of fair taxation as laid down in the German Constitution. The Court affirmed a stay of execution of the tax assessment notice for the claimant and specified the demands for such a suspension until the final decision (BFH, I B 85/13, dated 18 December 2013). Affected taxpayers should take all measurers to keep their assessments open and to stay the execution of their tax assessment notice.scope of the new category of investment funds. beinformed discusses some of the notable aspects.

German fiscal authorities have published guidance on some issues regarding the new German Investment Tax Act particularly with regard to the scope of the new category of investment funds. beinformed discusses some of the notable aspects.

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).