Germany’s Federal Ministry of Finance in late July 2015 released a discussion draft of a law for the reform of investment taxation. The discussion draft includes measures for fundamental reform of Germany’s investment taxation regime and a provision on the tax liability relating to gains on the disposal of portfolio investments.
The proposed reform concerning investment taxation (Investmentsteuerreform) would apply to investment funds—defined as any capital investment vehicles that are subject to the supervisory provisions of the German investment law or comparable foreign investment vehicles—and their investors.
Under the discussion draft, closed-ended investment funds—such as investment companies issuing a fixed number of shares, or closed-ended investment limited partnerships—or comparable foreign investment vehicles would be covered by the investment tax law. However, partnerships would only be within the scope of the changes if their “corporate purpose” serves directly and exclusively the coverage of obligations in connection with the “pension asset pooling” plans. The current fiscal investment restrictions for investment funds would be waived, at least for mutual funds.
The change would be intended to provide a new “intrasparent” tax system for the taxation of investment funds and their investors. In other words, this would allow for separate taxation of investment funds and investors. For example, there would be a new “advance flat fee” on “fictitious” taxable income, on which the investor would pay taxes so as to avoid an unlimited (in terms of timing) deferral.
Read a 2015 report [PDF 1.67 MB] prepared by the KPMG member firm in Germany: German Tax Monthly (September 2015)
This KPMG report also includes discussions of:
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.