The US federal income tax system has a unique entity classification regime that allows certain types of entities to choose their tax classification (i.e., opaque versus transparent). This choice is made by mailing to the US Internal Revenue Service a Form 8832 on which the entity literally checks a box corresponding to its desired tax classification, hence the phrase “check-the-box” election. This article provides an overview of the check-the-box rules and discusses some related considerations for non-US investment funds. more…
Proposed amendment to German Investment Ordinance – Additional flexibility for alternative Investments of regulated Pension schemes
On 27 June 2024, the draft of a Second Act to Strengthen Occupational Pensions and to Amend Other Laws was published. The draft, inter alia, proposes amendments to the German Investment Ordinance. Our fund experts have summarised what this means for pension fund investments in particular. more…
Fund Formation 2024 – Law and Practice in Germany
In this guide, leading practitioners answer the same key questions for their respective jurisdictions. PE Magazin authors Tarek Mardini, Enzo Biagi and Antonia Puglisi contributed the chapter on fund formation issues in Germany. more…
BAI study – Infrastructure is becoming the most popular asset class among institutional investors
A considerable amount of capital is required for the digital and ecological transformation of the economy and the modernisation of existing dilapidated infrastructure. This asset class is becoming increasingly popular among institutional investors, as a recent study by the industry association BAI shows. However, there are still some challenges to overcome with regard to the German market. more…
German Bundesbank reporting – Sanctions for non-compliance
From 30 April 2024, Regulation (EU) 2022/1917 of the European Central Bank (ECB) on infringement procedures in cases of non-compliance with statistical reporting requirements in connection with the monthly reports to the German Bundesbank will apply. Under this regulation, non-compliance with statistical reporting requirements is to be sanctioned more severely. more…
German Federal Fiscal Court confirms its case law on the taxation of management participations
In two recent judgements, the German Federal Fiscal Court (BFH) has confirmed that the profit from an employee’s participation in their employer’s company is not taxable as income from employment, even if the participation was previously acquired at a discount. more…
Private Client 2024 – German tax law at a glance
This country-specific Q&A provides an overview of private client laws and regulations applicable in Germany. It covers common issues in private client laws, including pre-entry tax planning, connection factors, taxation issues on inward investment, succession planning, trusts and foundations, immigration issues and tax treaties. more…
German exit tax when moving to Switzerland – The new “Wächtler” decision of the BFH
In its decision dated September 6, 2023 (I R 35/20), published on January 11, 2024, the First Senate of the German Federal Fiscal Court (BFH) dealt with the German exit taxation pursuant to Section 6 German Foreign Tax Act (AStG) in connection with relocations to Switzerland. In its decision the BFH comments on the much-discussed “Wächtler” decision of the European Court of Justice (ECJ). more…
Alternative Funds 2024 – Law & Practice Germany
The new Alternative Funds guide covers 15 jurisdictions. The guide provides the latest legal information on fund structures, regulatory and tax regimes, disclosure/reporting requirements, the roles of fund managers and investors, the rules concerning permanent establishments, the marketing of alternative funds, FATCA/CRS compliance, AML/KYC regimes and security and privacy concerns. The PE Magazin-authors Tarek Mardini, Antonia Puglisi and Enzo Biagi shed light on the German legal situation. . more…
Foreign non-profit organizations are to be exempt from capital gains tax in Germany under certain conditions
The German federal parliament has passed an amendment to the law to allow foreign non-profit organizations to receive a refund of German capital gains tax. However, the requirements for this are strict and will probably almost only be fulfilled by non-profit organizations from another EU or EEA member state. more…
VAT Exemption for Management of all Alternative Investment Funds (AIFs) from 1 January 2024
The Financing for the Future Act (ZuFinG) comprises, in addition to a number of other reforms to strengthen Germany as a fund jurisdiction, the VAT exemption of management services for all Alternative Investment Funds (AIFs), something for which industry representatives have hoped for over 15 years. The previous legal uncertainty will thus be lifted from 1 January 2024. Following the Bundestag’s approval of the ZuFinG and the VAT exemption it contains, the Bundesrat has now also given its consent. more…
No separate assessment of a tax-specific contribution account in the case of private foundations with legal capacity under German civil law
The first senate of the Federal Fiscal Court (Bundesfinanzhof, BFH) recently dealt with the question of maintaining a so-called tax contribution account for private foundations under civil law with legal capacity, which has been the subject of much discussion in the past. On the other hand, the BFH left open another question that is also relevant for practice. more…
Fund Management 2023 – German law at a glance
Learn more about the regulatory framework in fund management in Germany with a focus on fund authorisation and licensing, fund marketing, the different types of funds as well as the current trends in the industry. more…
Fundamental judgement of the Federal Fiscal Court on the taxation of gains from the sale of cryptocurrencies
On 14 February 2023, the Federal Fiscal Court (BFH) ruled on the taxability of gains from the sale of various cryptocurrencies. It primarily dealt with the concept of a taxable asset and the structural tax enforcement deficit. This ruling joins the majority of previous Regional Fiscal Courts´ case law on the taxation of cryptocurrencies and results in more certainty for taxpayers. more…
Transfer of domestic real estate by way of a legacy is not subject to limited inheritance tax liability in Germany
A bequest of domestic real estate can be exempt from inheritance tax, as a recent decision of the German Federal Fiscal Court shows. more…