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. While the effective tax rate paid by carried interest recipients under current German tax law is generally within the range of such other fund jurisdictions, the technical treatment differs. These and other legal and structural differences must be carefully considered in cases of cross-border carry schemes and when structuring international funds with German-based carry recipients.
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Carried interest developments in Germany
This article was first published in Global Tax Considerations in Private Fund Formation by PEI in August 2016.