Sat, Apr 30, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Law firm Dechert warns that the new German/Luxembourg tax treaty may impact on investors

Wednesday, May 09, 2012

Beverly Chandler, Opalesque London: Dechert reports that on the 23rd April 2012, Germany and Luxembourg signed a new Double Tax Treaty designed to replace the previous treaty dating back to 1958. The firm warns that the new Treaty may impact on many US, UK and other non-German investors as Luxembourg isoften used as a tax efficient jurisdiction for German inbound investments (particularly used by funds, private equity and real estate investors).

At a high level, Dechert lists the main changes as:

  • Explicit Treaty access for funds Luxembourg investment funds in the legal form of a SICAV, SIVAF or SICAR are to be able to claim Treaty benefits in their own name (leading to a reduction of German withholding tax from 26.375% to 15 % on (portfolio) dividends and to 0 % for interest payments). Investment funds of a contractual type (i.e. FCP) qualify for a limited Treaty benefit, i.e. subject to the (German) tax residency of its investor base.
  • Investment into real estate companies The Treaty provides for a new provision which covers capital gains from shares in companies which derive more than 50 % of their value directly or indirectly from real estate assets. Hence, investments in German real estate holding companies, held through a Luxembourg holding company, may be subject to German tax under the new Treaty.
  • Hybrid debt instruments (often used by private equity and real estate funds) Investments in German target companies (e.g. by private equity and real es......................

    To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Hedge funds see $14.3bn outflows in Q1, CTAs and multi-strategy lead net inflows[more]

    Komfie Manalo, Opalesque Asia: The hedge fund industry saw net outflows of investor capital in the first quarter of the year, totaling $14.3bn, data from Preqin showed. This continues from the $8.9bn overall net outflows that funds recorded in Q4

  2. Third Point calls Q1 "catastrophic" for hedge funds[more]

    Bailey McCann, Opalesque New York: The first quarter of this year was rocky for hedge funds based on aggregate performance from the industry, but now we are beginning to hear what the managers thought of it as quarterly letters make their way to investors. Dan Loeb, CEO of New York-based $17 bill

  3. Asia - Stabilization of China's capital outflows may hinge on Janet Yellen, Fink says China to do well this year as bubble threat postponed, Chinese hedge fund to invest in India’s infrastructure[more]

    Stabilization of China's capital outflows may hinge on Janet Yellen From Bloomberg.com: Whether China’s recent stabilization of its currency and capital outflows continues -- or downside pressure reignites -- may hinge in large part on Janet Yellen. If the Federal Reserve chair sticks to

  4. …And Finally - After all, judges are human too[more]

    From Newsoftheweird.com: In March, one District of Columbia government administrative law judge was charged with misdemeanor assault on another. Judge Sharon Goodie said she wanted to give Judge Joan Davenport some files, but Davenport, in her office, would not answer the door. Goodie said once the

  5. Comment - Unmasking the men behind Zero Hedge, Wall Street's renegade blog[more]

    From Bloomberg.com: Colin Lokey, also known as "Tyler Durden," is breaking the first rule of Fight Club: You do not talk about Fight Club. He’s also breaking the second rule of Fight Club. (See the first rule.) After more than a year writing for the financial website Zero Hedge under the n