Thu, Oct 23, 2014
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

Banner

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. Commodities - Oil wreaking havoc on small-cap energy stocks sliding 36%[more]

    From Bloomberg.com: Owning almost anything in the U.S. stock market has been a losing proposition since September. Owning smaller energy companies has been a catastrophe. Hercules Offshore Inc. and Resolute Energy Corp. are among 19 oil-and-gas equities in the Russell 2000 Index that lost more than

  2. Investing - Hedge funds favor equity long/short, Strategic bond managers hedge against further high yield sell-off[more]

    Hedge funds favor equity long/short From Securitieslendingtimes.com: Equity long/short strategies will generate good returns for hedge funds in the future, according to a panel at this year’s Risk Management Association Conference on Securities Lending in Naples, Florida. Panellists Sand

  3. Legal - Ex-hedge fund analyst weeps as judge hands down 5 year sentence, Former Columbus investment manager Steven P. Moore indicted on theft charges, SEBI confirms ban for Hong Kong hedge fund, SEC announces enforcement action against compliance officer[more]

    Ex-hedge fund analyst weeps as judge hands down 5 year sentence From Hereisthecity.com: An ex-hedge fund analyst was sentenced to 5 years in prison for his role in insider-trading scheme. The New York Post reports that former hedge fund analyst Matthew Teeple was sentenced Thursday to fiv

  4. Goldman in talks to acquire IndexIQ[more]

    From Bloomberg.com: Can Goldman Sachs put ETF investors on a liquid diet? Goldman is in talks to acquire IndexIQ, Reuters has reported. Index IQ is a small exchange-traded-fund firm known mostly for products that replicate hedge fund strategies, called "liquid alternative" ETFs. While IndexIQ has 11

  5. Other Voices: CALPERS dilemma should be a warning to hedge funds wanting institutional investors[more]

    From Ian Hamilton, founder of IDS Group. A quick comment on the CALPERS’ disinvestment from the hedge fund market and the jitters it is causing. Pension Funds should not be sheep and follow CALPERS’ decision as the issues that CALPERS has with hedge fund investments are in many ways unique t