Insights

New tax regulations impacting investment funds - January 2015

Germany, India, Ireland, Netherlands, Switzerland

Executive summary

Germany

New tax regulations under AIFM-StAnpG—guidance from the German fiscal authorities

At the second attempt, the AIFM Tax Adjustment Act (AIFM-StAnpG) came into force on 24 December 2013. The Federal Ministry of Finance (BMF) has issued a set of guidelines regarding, inter alia, the treatment of share classes, investment restrictions, allocation of expenses, distribution order, transitional arrangements and eligible assets.

India

The regulatory and tax framework for offshore funds investing in India

India opened its capital markets to Foreign Institutional Investors in 1992 as a part of wider economic reforms. Foreign Institutional Investors or FIIs (as they are popularly known in India) have played a very important role in the growth of the country’s economy as well as its capital markets. FII investments have grown (on a net basis) from US$826 million in 1993 to US$39 billion in 2014 (January to November 2014). Cumulative net investment by FIIs since 1992 has totalled over US$200 billion (www.sebi.gov.in).

Ireland

ICAV
The Irish Collective Investment-management Vehicle (ICAV) will be Ireland’s newest corporate fund vehicle. The ICAV offers enhanced distribution and a simplified compliance model. The ICAV is being introduced under new legislation which is tailor-made for investment funds resulting in a more efficient and effective fund structure.

Netherlands

The debate over the levying of Dutch dividend withholding taxes has continued over the last year, and there are a number of cases pending. Below, we cover some of the cases of interest to the asset management industry.

Switzerland

New tax opportunity for investment funds

Aberdeen withholding tax claims
Dividend payments received by Swiss investment funds on stocks from companies domiciled in a European Union (EU) member state could be subject to domestic withholding tax levied on outbound dividends. Under an applicable double tax treaty, such withholding tax may typically be reduced to 15% for portfolio investments. However, the tax treatment of dividends paid to resident investment funds and comparable nonresident investment funds may differ, and may therefore result in discriminatory treatment.

New tax regulations impacting investment funds - January 2015
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