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Fund Taxation Alert 2017-04

Fund Taxation Alert 2017-04

German Investment Fund Tax Reform. The KPMG GIFT Map is here!


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In 2018, German Investment Fund Taxation will have a significant impact on Luxembourg funds.

Our KPMG GIFT Map (PDF | 146KB)  will help to guide you through all the upcoming challenges!

The German Investment Tax Reform will directly affect the fund industry and – as Luxembourg is a hub for asset servicing and asset managers in Europe – a fundamental new set-up will be required to successfully administrate, sell and manage UCITS and AIF’s for German investors.

In order to handle these challenges and to be ready for the upcoming tax reform, the KPMG GIFT Map (German Investment Fund Tax Map) has been developed. It will guide you through all the necessary adjustments and help you to recognize all the areas that might be impacted by the reform.

Please keep in mind that the effective tax rate an investor has to pay for his investments is becoming increasingly important, especially as we are seeing a decreasing return of investments. The demand of your product will increase the lower the tax rate for the investor. Due to the German Tax Reform there are significant partial tax exemptions that will come into effect on an investor level for equity, mixed as well as real estate funds. The partial tax exemption could also potentially influence an investor’s decision to invest more in equity, mixed and real estate funds, even if the profitability of these products is not higher than for other products, e.g. bond funds. Therefore, it is crucial to analyze your current product portfolio from a German Tax point of view for eventual amendments to a high-demand product. We will be glad to support you in this matter.

Below are the main facts and impacts on different fund life circles through the German Investment Tax Reform:

  • Legal and reporting departments have to ensure that all prospectus are in line with the new law (Equity quote, treatment of tax exempt investors)
  • A status certification will need to already be applied in 2017
  • Contracts with third parties, fund administrators, and data providers (like WM data) need to be reviewed and adjusted in accordance with the new law
  • Asset Managers will need to set up clear investor communications that provide a precise overview of their products and show the readiness of the AM for the German Tax Reform
  • New products will be more attractive in the future (e.g. Alternative Investments, Special Investment Funds) which will lead to an assessment of the current product line
  • The interaction between your different departments (e.g. Reporting, Tax, Product Development and Legal) will be much more important as each decision taken by them could change the tax treatment of your products at an investor level

Please feel free to contact our specialized Team for all questions regarding the German Investment Fund Tax Reform.



Jonathan Streicher

Fund Tax Center of Excellence, KPMG Luxembourg
Phone: +352 22 51 51 7941
Mobile: +352 621 87 7941

Björn Ruppenthal

Partner, Head of International Fund Tax Services

Phone: +352 22 51 51 6651
Mobile: +352 621 87 6651

Corinna Goldkuhle
Associate Partner

Phone: +352 22 51 51 7935
Mobile: +352 621 87 7935

Francesca Schmitt
Assistant Manager

Phone: +352 22 51 51 7401
Mobile: +352 621 87 7401

Monique Dupré
Assistant Manager

Phone: +352 22 51 51 7207
Mobile: +352 621 87 7207

Any tax advice in this communication is not intended or written by KPMG to be used, and cannot be used, by a client or any other person or entity for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing, or recommending to another party any matters addressed herein.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

© 2020 KPMG Luxembourg, Société coopérative, a Luxembourg entity and a member firm of the KPMG network of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

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