Ongoing formal and substantive tax compliance, as well as the regulatory rules and innovations introduced by the German Capital Investment Code, are taking up an ever-increasing amount of day-to-day work for domestic and foreign private equity funds. For this reason, we have again picked out two topics this year, one from the tax environment and another from the regulatory environment of private equity funds, which we discuss in more detail below.

The first part of the article deals with the so-called zebra shareholders, i.e. the participation of commercial investors including corporations (corporate investors) in asset-managing partnerships. If a commercial investor participates in an asset-managing private equity fund, he cannot use the taxable result determined at the level of the asset-managing private equity fund, but requires a so-called additional commercial result.

We had already worked out the possible qualification conflict as well as the different interests of the individual investor groups in the qualification of the income of a private equity fund in the FYB Financial YearBook in previous years. This article deals with the necessity of these additional commercial results, the handling by the tax authorities and the resulting need for action.

The second part of the article deals with a sub-area of the implementation of the Alternative Investment Fund Manager Directive (hereinafter also "AIFMD") into national law. From the framework of the German Capital Investment Code (Kapitalanlagegesetzbuch), the requirements and special features of the so-called depositary for private equity funds are examined in more detail.

Asset-Managing PE Funds: Necessity of Additional Commercial Results and Handling by the Tax Administration

The qualification of income at the level of a private equity fund (PE fund) is of considerable importance for German investors (private investors on the one hand and commercial participants including corporate investors on the other).