The opening state­ments of our last artic­les in FYB 2022: Πάντα ῥεῖ — Ever­y­thing flows! and “Little flows in the right direc­tion!” (FYB 2022) may still be remem­be­red by the incli­ned readers of the annual issues of the FYB Finan­cial Year­book. The back­ground at the time was the increased and inten­si­fied preoc­cu­pa­tion of the tax autho­ri­ties with the taxa­tion of private equity funds or the share­hol­ders of private equity funds liable to tax in Germany and, above all, the frus­tra­tion that the tax autho­ri­ties had simply nega­ted seve­ral unequi­vo­cal and land­mark rulings of the highest German tax court, the Fede­ral Fiscal Court (Bundes­fi­nanz­hof, BFH), for many years despite knowing better. Recently, a first brea­kout from this time loop seems possi­ble. Has the tax autho­ri­ties (finally) reco­gni­zed the neces­sity and useful­ness of private equity and venture capi­tal and “fallen in love” with this asset class? — In the motion picture we regu­larly cite, “And Every Day is Ground­hog Day,” it was Rita’s love, after all, that freed Phil Connors from his Ground­hog Day loop in Punxsutawney.

For more than 26 years, our law firm has been deal­ing with a wide range of tax compli­ance issues for private equity funds and their (German) share­hol­ders. In the run-up to writing this article, records of the 8th Munich Venture Capi­tal Confe­rence in 2004 fell into our hands more or less by chance.

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