Tax Compli­ance for Private Equity Funds

Ever­y­thing flows! In the intro­duc­tion to last year’s article, we noted that the taxa­tion of private equity funds and the share­hol­ders of private equity funds subject to taxa­tion in Germany has incre­asingly become the focus of the tax autho­ri­ties in recent years. Howe­ver, these issues have long since reached Germany’s highest tax court, the BFH, as eviden­ced in parti­cu­lar by some very note­wor­thy BFH rulings in recent months. 

To anti­ci­pate at this point: We see a lot of light on the side of the BFH and (even more?) shadow on the level of the tax autho­ri­ties and the legis­la­tor. Even clear and unam­bi­guous as well as dogma­ti­cally impec­ca­ble judgments are either simply igno­red by the tax autho­ri­ties or result in a draft bill of the Fede­ral Minis­try of Finance, in which an unwel­come case law, which corrects a sense­l­ess appli­ca­tion or inter­pre­ta­tion of the law by the tax autho­ri­ties, is then rever­sed by way of a legis­la­tive amend­ment and the origi­nal opinion of the tax autho­ri­ties is simply codi­fied in law.

On May 08, 2019, the BMF published as a draft bill the “Draft Act on the Further Tax Promo­tion of Elec­tro­mo­bi­lity and on the Amend­ment of Other Tax Regu­la­ti­ons” (“Elec­tro­mo­bi­lity Act” or better “JStG 2019”), which the Fede­ral Cabi­net laun­ched as a draft bill almost unch­an­ged on July 31, 2019. The name of the bill is mislea­ding. Certainly, the majo­rity of taxpay­ers have much to gain from a law promo­ting elec­tro­mo­bi­lity through taxa­tion. Howe­ver, this is again a so-called omni­bus law in which nume­rous tax regu­la­ti­ons are to be chan­ged or intro­du­ced for the first time, in some cases massi­vely, but this is clearly lost in the name of the law.