On 2 August 2019, the German Ministry of Finance (BMF) issued a circular granting a deadline extension for investment funds to file a reclaim on behalf of tax-exempt investors with a German paying agent or sub-custodian. This is based on § 7 (5) s. 2 of the German Investment Tax Act (GITA), in connection with §§ 8 to 10 GITA for dividends paid before 1 July 2018. The new deadline to file the necessary documents is 31 December 2019.
Based on the GITA’s general 18-month deadline, if a dividend is paid on 15 January 2018 the reclaim must be filed with the German paying agent or sub-custodian by 15 July 2019.
Since the implementation of the new template provided by the German tax authorities into the bank’s IT systems was slow, it meant that a reclaim could only be filed in the second half of 2019. That’s towards the end of the 18-month deadline for dividends paid in the first six months of 2018.
Because of this, the Ministry of Finance granted a deadline extension to 31 December 2019 for dividends paid before 1 July 2018.
KPMG welcomes this development because it allows market participants to keep using the less cumbersome method of a German paying agent or sub-custodian to obtain refunds that potentially tax-exempt investors have already requested or could request in the coming weeks for dividends paid in early 2019.
KPMG can help you deal with refund requests from tax-exempt investors and has created a dedicated service offering.
So, if you receive such a request, don’t hesitate to contact us.