Foreign businessmen who are interested in setting up an investment fund
should know that the European Union (EU) provides an attractive legal environment, but several countries within the EU are known for their high quality services applicable to this industry. Germany
is one of the most developed economies in this sense and it is advisable to open a fund
here and one of the main reasons refers to the taxation system
applicable to this type of business establishment. Our team of German lawyers
can offer assistance on the tax level
applicable to each type of fund
Taxation system applicable to German funds
At the moment, the taxation regulations
applicable to German funds
are going through important changes, which will enter into force starting with 1st of January 2018. The Investment Taxation Reform Act
is a proposed governmental act, which will improve the current tax legislation
applicable to funds in Germany
One of the most important provisions of the Act refers to the participation exemption to shareholding, which will be applicable at the rate of 10%.
The new Act can be comprised in two main parts, which refer to a transparent taxation system
, applicable to UCITS
and alternative investment fund
s, and a semi-transparent taxation system
, available for special investment funds
; our team of German attorneys
can provide more details on the types of funds
Taxes applicable to German funds
One of the proposed regulations refers to the abolition of the tax reporting requirements applicable to investment funds. Information which has to be presented in the Federal Gazette, such as the deemed distributed income, will no longer be necessary, due to the costs involved.
Both German and foreign investment funds
with activities in Germany
will be imposed with a 15% tax on income
. The same rate will be applicable to German dividends
Under the new Act, the local authorities have also changed the meaning of the investment funds, which will also take into consideration single investment funds, as well as non-commercial bodies which are not subjected to taxation.
Businessmen who need to receive further information on the taxation
applicable to investment funds
can address to our German law firm
for more details.