Newsletters

06.07.2017

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German Fiscal Court on Funds and Equal Treatment Under the EU Freedoms

Under the current tax regime Germany grants a tax exemption only for domestic funds but not for foreign funds. The Fiscal Court Münster (20/04/2017,10 K 3059/14 K) ruled that this does not violate the EU freedoms because the situation of German funds is not comparable to that of foreign funds. In the case at hand a foreign real estate fund (a Luxembourg fonds commune de placement, or FCP) holds German real estate directly. The foreign fund claimed that it should be exempt from German tax on the rental income. It argued that because of the tax exemption granted to a German domestic fund, a Luxembourg fund should be granted the same treatment and thus receive the same tax exemption privilege.

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