On 18 January 2007, the German Federal Ministry of Finance published newly proposed amendments to the Investment Act.
Under the proposed amendments, foreign funds will only qualify as investment funds under the Investment Act if they offer their investors a redemption right. Since the Investment Tax Act follows the Investment Act in terms of scope, this would result in the following:
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Foreign closed-ended funds will no longer be burdened with the reporting requirements of the German Investment Tax Act.
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German investors will be taxed under the regular tax rules. No lump sum taxation will apply.
We will inform you of any future developments.
Please note that the above communication merely provides a high-level overview of the legislative developments.