ARTICLE
10 October 2017

German Tax Reform In 2018 – What Will Change? (Video)

AM
Arendt & Medernach

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About Arendt

Arendt combines the entire value chain of services dedicated to Asset Managers, Banks, Insurers, Public Institutions and Private Clients operating in Luxembourg.

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Legal & Tax

We assist clients in structuring and running their business from a legal and tax standpoint across Luxembourg. Our teams directly serve international clients or work in close collaboration with foreign partner law firms.

Together with our regulatory consultants and investor services experts, we bridge the gap between legal/tax advice and its implementation. We deliver best-in-class services along our clients’ business life cycles.

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Germany is one of the main economies of Europe. In terms of fund distribution it's also one of the key jurisdictions for the Luxembourg market. On January 1st 2018, in Germany, the Tax Law will change in respect to fund taxation.
Germany Tax

What you need to know about the German Tax Reform 2018 in a 2 minutes video.

Our Tax seminar "Fund Distribution to German Investors in 2018 – What will change?" took place on September 26th 2017 at Arendt House. We have asked our Tax Law Partner Jan Neugebauer, to give us his insights about this topic.

Should you require more information, please contact our partner in Tax Law: Jan Neugebauer.

You will find his reaction below:

Germany is one of the main economies of Europe.

In terms of fund distribution it's also one of the key jurisdictions for the Luxembourg market.

On January 1st 2018, in Germany, the Tax Law will change in respect to fund taxation.

In particular, how German investors will be taxed with regards to their investments in foreign and German funds but also how German funds are taxed in the future.

With regards to existing funds already distributing their products to Germany, they need to review and adapt their fund documentation to ensure that they are aligned with the future rules.

They should ensure with their investors whether they want to opt for the transparent special fund taxing in the future – to the extent available - or whether their investors would rather have a preference to go for the opaque standard regime going forward. Fund promoters will have to address probably into the existing fund documentation certain of those needs and they may have to review those documentations in more detail.

With regards to new funds however, the Luxembourg tool box for the fund industry provides a flexible regulatory, tax and legal regime ranging from UCITS to unregulated alternative investment funds, from corporate vehicles via partnerships to contractual vehicles. It offers the flexibility to address those changes quite efficiently in the future as well.

In general, the tax reform is likely good news from Luxembourg perspective. It offers Luxembourgish investors and Luxembourgish funds a good opportunity to attract German investors with the possibilities of the various funds products in Luxembourg. However, existing funds, already distributing their products to the German market should review their documentation in order to ensure that they are aligned with their investors' interests in the future as well.

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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