In P+P's Client Information dated
12 December 2012 and
31 January 2013 we provided information about the drafts
of a German Act on the Adaption of Investment Fund Taxation in
Connection with the AIFM Directive (the
"Act"). In the meantime the Act has
passed the German Parliament (Bundestag). However, the
Federal Council (Bundesrat) submitted the Act to the
Conciliation Committee (Vermittlungsausschuss). Yet,
negotiations in the Conciliation Committee
(Vermittlungsausschuss) ceased on 26 June 2013.
The issue was a dissent regarding the so called pension asset
pooling. This is not directly linked to the implementation of the
AIFM Directive into German law. The very controversial
mandatory lump-sum taxation (which is no longer part of the Act)
was not the cause of a halt in the negotiations.
The Act will not obtain the necessary consent of the Federal
Council (Bundesrat) before the Capital Investment Code
(Kapitalanlagegesetzbuch) enters into force.
Under the current timelines of the German Parliament
(Bundestag) and the Federal Council (Bundesrat)
the legislative process may be completed prior to the federal
election (Bundestagswahl), which takes place on 22
September 2013. However, in this case or if the Act passes
both chambers of the parliament at a later date it is possible that
the Act will enter into force with retroactive effect as of 22 July
If the legislative process cannot be completed prior to the
federal election, the Act dies. Should this occur the legislative
process must be fully restarted and the Act will need to obtain
consent again from the new German Parliament (Bundestag)
and the Federal Council (Bundesrat).
II. Transitional Rules introduced by the German Federal
Ministry of Finance
The Federal Ministry of Finance introduced certain transitional
rules by way of a ministerial circular. Under this circular the
German Investment Funds Act (Investmentgesetz) which will
be abolished as of 22 July 2013 is deemed to remain into force
solely for tax purposes.
The German Investment Funds Tax Act
(Investmentsteuergesetz) still applies to investment funds
which qualify as such under the German Investment Funds Act
(Investmentgesetz) after 21 July 2013.
Investment funds that are established after 21 July 2013
but qualify as investment funds under the (then abolished) German
Investment Funds Act (Investmentgesetz) still fall within
the scope of the German Investment Funds Tax Act
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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