German Investors “Going Crazy” as They Anticipate Tax Regime | 15.12.2017

Our partner Dr. Oliver von Schweinitz was quoted in Bloomberg’s BNA International Tax Monitor on German investors’ scrambling to make sense of impending tax changes just weeks before far-reaching reforms take effect.

The penultimate circular, draft guidance of more than 100 pages that is meant to clarify the sweeping changes set to take effect Jan. 1, fails to tackle big questions.

The circular, which was obtained by Bloomberg Tax, has not yet been published. The Ministry of Finance has spent months drafting it to address issues such as extensions on exemption certificates and investors’ ability to rely on data services.

But attorneys say the draft circular likely won’t be released for some time, and doesn’t address some big questions pertaining to real estate funds, leaving them to play touch and go in the dark with the act scheduled to take effect in just a few weeks’ time.

[…]

Real estate funds are experiencing only a few procedural tweaks under the new system. But for an industry with specific investment needs, constraints, and fund structures – such as write-offs for buildings and fund-within-fund designs – there’s confusion in the details. All of the questions arising are a big issue, so the big tax decree will also partially or fully deal with such issues. At least that’s the hope.

The latest version of the finance ministry’s draft circular doesn’t address such issues such as how real estate funds are supposed to compute quarterly pre-payments of corporate taxes without any precedent for doing so, Oliver von Schweinitz, a partner with GGV law firm in Frankfurt, said.

“Real estate funds are still very much in the dark as to how they are supposed to compute the advanced payment,’ von Schweinitz told Bloomberg Tax Dec.14. “There’s no withholding tax, so they need to come up with some measure, and that measurement Needs to somehow fit into the daily assessment of net asset value.”

“In the new world, the fund needs to assess its profit on an estimate basis, and there’s nothing in the decree really to address that point,” he added.

[…]

Snapshot:

  • changes take effect Jan.1
  • leaked guidance leaves open questions for real estate

 

To read the complete article see attached PDF.

 

Dr. Oliver von Schweinitz  berät Unternehmer und Unternehmen an den Standorten Hamburg und Frankfurt im nationalen und internationalen Steuerrecht sowie im Wirtschafts- und Immobilienrecht.

Spezialgebiete Bankaufsichtsrecht (Trennbankengesetzgebung, Dodd-Frank-Act), Besteuerung von offenen und geschlossenen Fonds, Immobilien- und Immobiliensteuerrecht, Private Equity, Recht des Informationsaustausches (QI, FATCA, CRS), Wirtschafts- und Steuerrecht – auch im Kontext mit US-Recht.

Büro Hamburg, Tel. +49 40 369633-56, schweinitz@gg-v.de