Our Client Newsletter
We follow our industry's important developments in proposed legislation, administrative and court decisions as well as in the market. We analyze issues of particular interest and regularly publish our analysis and conclusions in client newsletters that we promptly distribute via email.
Cadbury Schweppes CFC privilege also for non-EU companies?July 4, 2017
The German Federal Tax Court decided whether the German CFC rules also apply to foreign companies located outside the European Union. Whereas the German CFC legislation, in the case of companies located within the European Union, provides for an exemption if the foreign company can prove "real economic activity", such an exemption is not granted to companies located outside the European Union. The German Federal Tax Court believes that this may be contrary to the principle of free movement of capital. The Court therefore puts this question to the European Court of Justice.
Newsletter, July 4, 2017 (PDF)
German Civil Court: Administration Fees for a German FundJune 22, 2017
The Bundesgerichtshof (German Federal Civil Court) decided on whether a fund manager may ask for an administration fee in addition to the management fee. As far as banks are concerned, this practice by and large has been found to be not in line with German law. The Court now ruled that the same is not true in a fund context. Under German investment law, a fund manager has a right to be reimbursed for reasonable expenses incurred in the best interest of the fund. This right exists side-by-side with the management fee to which a fund manager is entitled. However, the Court's decision makes it clear that reimbursement clauses are only for covering costs and not for providing an additional profit margin to the fund manager.
Newsletter, June 22, 2017 (PDF)
Implementation of the Multilateral Instrument in Germany and LuxembourgJune 21, 2017
In our beinformed dated 19 January 2017, we addressed the multilateral instrument (MLI) of the Organisation for Economic Co-operation and Development (OECD). As a part of the BEPS (Base Erosion and Profit Shifting) project of the OECD, the MLI is meant to adopt and synchronize existing double tax treaties which are – according to the OECD – one of the major drivers of inappropriate tax avoidance strategies by abusing different tax treaties jurisdiction (“treaty shopping”). With the help of the MLI, adjustment processes of double tax treaties will be reduced significantly. After the first draft of the MLI was confirmed on 24 November 2016, ministers and other high-level representatives of over 60 states signed the international treaty on 7 June 2017 in Paris. Our beinformed illustrates the implication of the MLI in Germany and Luxembourg.
Newsletter, June 21, 2017 (PDF)
German Federal Ministry of Finance clarifies determination of the applicable partial tax exemption regime under 2018 Investment Tax ReformJune 20, 2017
The German Investment Tax Reform will enter into force on 1 January 2018. Meanwhile, the German Fiscal Authorities are working on a comprehensive circular to address and clarify important questions arising in connection with the interpretation of the new law before the end of the year. In advance of this circular, the German Federal Ministry of Finance issued a letter to the relevant fund industry associations in which the Ministry explains its view of the determination of the partial tax exemption regime applicable to real estate funds, equity funds and mixed funds.
Newsletter, June 20, 2017 (PDF)
First Reparation Legislation of the German 2018 Investment Tax ReformMay 4, 2017
The German Parliament passed the German Act to Combat Tax Avoidance (Steuerumgehungsbekämpfungsgesetz) at the end of April. The focus of this Act is the fight against the concealment of commercial activities through companies domiciled abroad (see also our beinformed Newsletter dated 15 February 2017). Moreover, Article 10 is the first law to amend the German Investment Tax Reform effective as of 2018 (see also our beinformed Newsletter dated 12 July 2016, German Investment Tax Reform – Changes for German and Foreign Funds as of 2018). In the following Newsletter, we would like to introduce and analyze the amendments of the Investment Tax Reform effective as of 1 January 2018.
Newsletter, May 4, 2017 (PDF)