Abstract:

After a long journey about four years, the German legislative adopt a new German Investment Tax Act as of 26 July 2016. This law will come in force beginning 2018. The taxation of investment funds and its unit holders will change significantly. This also applies for shares in a fund which have already been acquired by investors since the reform will not provide for comprehensive grandfathering provisions. Insofar, there is also a need for existing investments in funds and structures, since as of 31 December 2017 a profit realizing switch into the new investment tax regime will be effected. The general principle of a transparent taxation at the level of investment, as a consequence, that the tax effects of fund investments shall be equal to a direct investment, will be abolished. Thus an intransparent tax system at the level of investment fund will be implemented. This article wants to explore the background of this turnaround as well as to show the new taxation system for UCITS. In addition, several tax calculations shall show the effects with regard to the future taxation for private capital investors. For these capital investors one result could be, that investment decisions have to be made increasingly taking into account tax effects. Finally, it shall be asked, if this kind of new tax regime can be an example for European investment fund rules with regard to decisions of European Court of Justice.