On 1 March 2013, the upper house of the German federal parliament agreed to the bill for the implementation of the ECJ judgment of 20 October 2011 in the Case C-284/09. As a result, earnings from shareholdings of less than 10% will be fully taxable for corporate investors as of 1 March 2013. The tax treatment for business investors subject to income tax does not change; these investors continue to be subject to the partial income method (Teileinkünfteverfahren).

On 30 January 2013, the German federal government introduced the draft Act Amending the German Investment Tax Act and Other Acts (AIFM Tax Amendment Act, or GITA-AIFM) in order to adapt the German tax laws to the new regulatory regimes which implement the AIFMD into German law, thereby commencing the legislative enactment process, which requires the approval of the upper house of the German parliament.

In our Client Newsletter, we will focus on outlining the scope and timing of the application of the GITA-AIFM and the consequences thereof for different asset and fund types.

The draft of the future German Investment Tax Act, which should enter into effect simultaneously with the new German Investment Code on July 22, 2012, was published today. In our Newsletter we outline the new scope of application in particular. In the future, the legislator must decide where to draw the dividing line between alternative investment funds under the German Investment Tax Act and alternative investment funds under the general tax rules.