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Fund Taxation Alert 2019-05

Fund Taxation Alert 2019-05

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Extended deadline for German domestic claims for tax exempt investors on the level of the sub-custodian

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.

Example

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.

New deadline on an exceptional basis

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’s comment

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.

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