Are you ready for the new annual German tax reporting starting on 1st Jan 2019?
29 November 2018
Operational Tax News
The first year of the new German Investment Tax Act is almost over. We therefore would like to use this occasion to remind you that the new pre-lump sum taxation will take place for the first time as of 1 January 2019.
In order to provide more clarity with respect to the new opaque taxation system and also to anticipate questions from your German investors, it is strongly recommended to cross-check the information made available on WM-Daten and to provide your investors with the annual tax relevant information.
In order to assist you with these new requirements, Deloitte has developed a solution:
- Preparation of a comprehensive summary of German tax events occurred during the year, so that your investor can recalculate and/or understand the taxable income linked to his investment in the fund: including distributions, pre lump-sum amount (for the whole year and monthly amount)
- Additional explanations on how to use the tax information
- This information is particularly relevant for investors without German depositary banks. They need this information to declare the taxable income linked to their investment in the fund in their annual tax return
- At the same time, we will take the opportunity to check the accuracy and completeness of the data published on WM Daten. This check is critical as most of your investors will be taxed on this basis.
Even though the taxation is in principle done automatically for investors with a German depository bank, we want to highlight that institutional investors and also investors without German depositary banks will need this additional information for their tax return. As the information in WM-Daten is not publicly accessible, this information should be made available to the investors.
The report to investor should be provided in the form of an annual report similar to the UK report. It should either be published on your webpage or provided directly to your German investors. This is why we recommend that you already check with your IT team that this report can be uploaded in the same way as the UK report for example.
Please do not hesitate to contact us in order to schedule the production of this new reporting.
Together with the above, we would like to use this occasion to remind you that the extended legal deadline for prospectus updates with respect to fund qualification as equity or mixed fund will expire 31 December 2018. Prospectus updates have to be done before this date to ensure the validity of the self-declaration and to avoid the loss of the favourable tax status.
Marie Von Gaisberg