The topic investment taxation includes in particular the taxation of investment funds and their investors on the basis of the Investment Tax Act (InvStG), which was completely reformed by the Investment-Tax-Reform-Act with effect from 1 January 2018. More specific details and explanations on the InvStG can be found in a number of circulars issued by the German Ministry of Finance.
In addition to the InvStG, there are a number of other tax laws relevant for investment funds and their investors which play an important role in the association's activities. These are, for example, at the national level the foreign taxation act (AStG), the income tax act (EStG), the trade tax act (GewStG) or the value added tax act (UStG), or at the European or international level the amending directive on the mandatory automatic exchange of information (Directive on Administrative Cooperation - DAC), with the implementation of OECD standards and the Anti-Tax Avoidance Directive (ATAD). The plan for a financial transaction tax (FTT) could also be resumed by the EU.
The Investment Tax Reform Act fundamentally reformed the InvStG with effect from 1 January 2018. With its introduction, the semi-transparent taxation procedure - not all income is attributed to the investor - was restricted to special investment funds. Investment in such funds thus became more favourable from a tax perspective than direct investment. Other investment funds are now subject to a non-transparent taxation system that is simpler and easier to administer.
The reform also integrated the taxation regime for investment companies and addressed the problem of so-called cum/cum transactions.
The InvStG is specified in a large number of application letters from the BMF.