Learn more about the German practice of venture capital law, including equity structure, typical investment periods, incentives as well as insights and opinions on the most common legal issues. . more…
Decree of German Ministry of Finance on crypto assets – Investors must act
The German Federal Ministry of Finance (BMF) has revised the 2022 letter on the taxation of crypto assets and published it in a new version on 6 March 2025. The substantive legal assessment of most issues has not changed – but the tax authorities are significantly increasing the procedural pressure, particularly on private investors. Some expected issues have still not been addressed. more…
US Tax Withholding Considerations for LP Secondary Transactions
When a non-US person sells an interest in an entity that is treated as a partnership for US tax purposes, such as a private investment fund, the buyer may be required to withhold and remit to the US Internal Revenue Service a portion of the purchase price, unless the buyer receives from either the seller or the partnership a certification that no withholding is required by reason of an exemption. A buyer that fails to withhold may be liable for the underlying tax, and in some cases the partnership may be required to withhold from future distributions to the buyer or be liable for the underlying tax. This article provides an overview of the two applicable withholding regimes in the context of LP secondary transactions. more…
Private Markets 2025 – The Expansion of the Private Wealth Segment accelerates
2025 is emerging as a pivotal year for the “democratization” of private markets, with the DACH region experiencing a significant shift in the personnel landscape. more…
News on the taxation of a holiday home held through a corporation
In many cases, holiday homes and other self-used properties are not held directly, but through a corporation. This is particularly the case in Spain, which is very popular with Germans, but also in many other regions of the world, such as the United Arab Emirates (Dubai) or South Africa. However, in a much-publicized decision in 2013, the German Federal Fiscal Court (Bundesfinanzhof, BFH) ruled that the private use of the property by the shareholders, either free of charge or at a reduced rate, constitutes a so-called hidden profit distribution, which leads to taxable income from capital gains for the shareholders in Germany. In a new decision dated October 1, 2024, the BFH once again confirmed its legal opinion and specified when a hidden profit distribution can be assumed and how it should be calculated. more…
Carried interest from US funds – No ‘commercial profit’ within the meaning of Art. 7 DTT-USA
The Schleswig-Holstein tax court has ruled that carried interest of US asset management funds does not constitute ‘commercial profits’ within the meaning of Art. 7 DTT-USA. Carried interest can therefore only be taxed in Germany if it is paid to a person resident in Germany. This affects all those carry beneficiaries who are also taxed abroad on their carried interest and is particularly relevant in light of the possible change in the taxation of carried interest in the United Kingdom. more…
Bureaucracy relief and financial market digitization – What fund managers can expect in 2025
The Fourth Bureaucracy Reduction Act (BEG IV) and the Financial Market Digitization Act came into force at the turn of the year. The aim is to reduce bureaucracy by making cross-legislative adjustments. In the area of digitalization, the financial market is simultaneously experiencing the introduction of new rules, including the EU regulation DORA (Digital Operational Resilience Act). more…
Potential Double Taxation of Distributions from a Foreign Trust
In individual cases, distributions from a taxopaque foreign family trust to a German tax resident beneficiary may be subject to both gift tax and income tax. This was recently decided by the Munich Fiscal Court, basically confirming the guidelines laid down by the Federal Fiscal Court. . more…
Corporate Governance – What you need to know about German law
The German Chapter of the international legal guide “ICLG – Corporate Governance Laws and Regulations” covers common issues in corporate governance laws and regulations – including in management bodies, shareholders & other stakeholders, transparency & reporting, and corporate social responsibility. more…
Potential gift tax relief for capital contributions to corporate entities
According to a recent ruling dated May 23, 2024, published on August 1, 2024, the Münster Fiscal Court has affirmed the requirement of a subjective element to trigger German gift tax pursuant to Section 7 para. 8 German Inheritance and Gift Tax Act. more…
US Entity Classification Considerations for Non-US Investment Funds
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…