In the referendum held on 23 June 2016, the British people voted to leave the European Union (EU). Whereas the economic impact of ‘Brexit’ is being discussed extensively, its tax implications have not yet been the focus. It is obvious that ‘Brexit’ will end the UK’s membership in the Customs Union as well as the UK’s participation in the harmonized European system for value-added taxes and excise duties. Less obvious is the impact of ‘Brexit’ on certain provisions of German national tax law that link preferential treatment to EU or European Economic Area membership: ‘Brexit’ will change the tax treatment of German-based shareholders and beneficiaries of UK businesses, companies, trusts, and foundations for the worse. more…
International exchange of data in tax matters – a revolution ist just around the corner
In the near future, international data exchange in tax matters will revolutionize taxation procedures in Germany and other countries. Due to the taxation of worldwide income in many countries, one observes the revenue authorities’ deficits with regard to foreign situations, because the ability to investigate on a national level general ends at the national borders. The direct exchange of tax data between the tax authorities of individual countries is supposed to remedy this state of affairs. more…
Draft circular on investments of German pension funds
On 21st December 2016, the German Federal Financial Services Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) published a draft circular concerning investments of German regulated pension funds for consultation. The draft addresses the regulator’s views on important aspects of the German Investment Ordinance (Anlageverordnung) which contains the material regulatory rules for investments of German pension funds. more…
Legal due diligence panel discussion
A thorough review of the terms and conditions of the limited partnership agreement (LPA) is a vital part of the due diligence that any investor considering investing in a private equity or venture capital fund should undertake. To examine the area of legal due diligence in depth, PEI asked a panel of distinguished fund formation experts to comment in a number of issues. . more…
Carried interest developments in Germany
The tax treatment of carried interest in Germany shares many similarities with the tax treatment in other main fund jurisdictions, but there are distinct differences. . more…
German Real Estate Transfer Tax and Share Deals
Transactions concerning German real estate usually trigger Real Estate Transfer Tax (RETT) of 3.5% to 6.5% of the purchase price or the asset value. The actual tax rate depends on the location of the real estate. However, there are some opportunities to avoid this tax by executing a share deal rather than an asset deal. Consequently, such share deals are gaining more and more attention from the fiscal authorities and the politicians want to propose a reform of RETT. more…
International harmony versus national fragments
Private equity professionals navigating national and cross-border regulations will need to address three legal changes set to take effect in Germany this year, writes Andreas Rodin. more…