The criteria for differentiating between open-ended and closed-ended alternative investment funds (AIFs) as set forth in the German Investment Code (KAGB) will probably not continue to apply after the recent legislative procedure of the EU Commission

Unfortunately, the German legislator could not agree on a final draft of the Act Amending the German Investment Tax Act and Other Acts ("GITA-AIFM") yet. As a result, the legislative process regarding the GITA–AIFM has been put on hold and will not be finalized prior to the upcoming German federal election on September 22, 2013. Thus, the German legislator will have to commence an entirely new legislative enactment process in order to align the German investment fund taxation with the AIFMD during the next legislative period. 

To provide some legal certainty in this situation, the German Federal Ministry of Finance issued an Ordinance on July 18, 2013, stating that the previous scope of application of the GITA would continue to apply to investment funds that comply with the current requirements of the German Investment Act until a new statutory regulation of the GITA’s scope of application is passed and enters into force.

The German Federal Ministry of Finance has declared in an Ordinance dated July 18, 2013 that the scope of the German Investment Tax Act ("GITA") will continue to apply to domestic and foreign investment funds within the meaning of the German Investment Act even though said Act will be repealed as per July 21, 2013. This provisional rule is necessary because the legislative process regarding the Act Amending the German Investment Tax Act and Other Acts (AIFM Tax Amendment Act, or "GITA-AIFM") is still not finalized.