Dear Ladies and Gentlemen,
The Bundesverband Alternative Investments e.V. (BAI), the central lobby of the alternative investment industry in Germany, criticises the unexpectedly initiated amendment to the Foreign Tax Act, which leads to a paradigm shift in the taxation of investment funds.The amendment to the AStG is part of the Act on the Implementation of the Anti-Tax Avoidance Directive (ATAD-UmsG), which was consulted last week by the Federal Ministry of Finance with just under three days' notice. The regulation in § 7 AStG, according to which additional taxation only applies subsidiarily to investment taxation and which has been in effect for almost two decades, is now to be abolished.
With regard to the cabinet appointment scheduled for today, BAI Managing Director Frank Dornseifer commented on the paradigm shift as follows: "In our view, the deletion of § 7 AStG and the resulting abolition of the principle of priority application of the Investment Tax Act over the Foreign Tax Act is highly problematic. On the one hand, a hierarchical structure established over almost two decades and guaranteeing a high degree of legal security for all users will be abolished. On the other hand, the recently comprehensively reformed investment tax law and the objectives associated with it, such as the equal treatment of domestic and foreign funds and a clear simplification of procedures in key areas, will be cancelled out or counteracted by the proposal."
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