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ARTICLE · 05 FEBRUARY 2018

2018 German Tax Reform For Investment Funds

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A new tax law came into effect on 1 January 2018 affecting German domestic and foreign funds holding German investments or being promoted by German asset managers.

GermanyFinance and Banking
Anja Grenner
Anja Grenner

A new tax law came into effect on 1 January 2018 affecting German domestic and foreign funds holding German investments or being promoted by German asset managers.

There were various reasons for this new law to be put into place: firstly, the old law discriminated against foreign investment funds and it facilitated unwanted tax avoidance. Secondly, it was both too expensive and too complex for an error-free application at (retail) investor level.

While the taxation of foreign resident investors in Germany and in foreign investment funds remains fairly unchanged, for investments in real estate and equity funds, German investors may benefit from a partial tax exemption of income.

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