Changes to the German Investment Tax Act May Have A Major Impact on Non-German Fund Structures
Heiko Stoll and Dr. Bernulph von Crailsheim
Simmons & Simmons
Draft legislation (the Draft) issued by the Ministry of Finance on December 4th 2012, and designed, inter alia, to implement the AIFM-Directive into German tax law, will make significant changes to both the scope of the German Investment Tax Act (InvTA) and the taxation of German investors under InvTA. This note explains recent developments in connection with these proposed changes and their potential impact on funds not established under German law. In particular, investors in certain non-German funds may in future cease to qualify for tax transparent treatment and, instead, be subject to a less beneficial lump-sum tax regime.