Yesterday, the German Parliament (Bundestag) enacted the Act Amending the German Investment Tax Act and Other Acts (AIFM Tax Amendment Act) after having made important amendments to the draft Act dated January 30, 2013 based on the Finance Committee's recommendations.

Equally important is what was not amended: although the opposition forcefully insisted on the introduction of a lump-sum taxation for accumulated earnings of investment corporations (Kapital-Investitionsgesellschaften), such lump-sum taxation did not find its way into the now enacted German Investment Tax Act.

Management advisory services for investment funds provided by a third party is exempt from VAT according to the ECJ if the recommendations still need to be implemented by the investment management company.

In reaction to the ECJ¹s judgment of 20 October 2011, on 1 March 2013 Germany passed a law on 1 March 2013 according to which EU and EEA corporations are allowed to apply for a refund of the German dividend withholding tax on portfolio dividends under certain conditions. The refund procedure should generally apply to dividends received in 2013 and future periods but also retroactively to dividends received during the 2012 fiscal year or earlier, provided the statute of limitations has not yet lapsed.