Fund Taxation Alert 2024-04

In August 2019, the Hessian Fiscal Court issued negative decisions based on the coherence justification (i.e., putting forward that the exemption applied on dividend distributions to German funds was directly connected with a subsequent taxation at the level of the German investor). The negative decision was appealed by the test claimants to the German Federal Fiscal Federal court (“the Court”).

On 13 March 2024, at the Court, there was a hearing regarding cases IR 2/20 and IR 1/20, related to the eligibility of foreign investment funds to obtain a refund of German source WHT.

In the hearing, KPMG and the German Tax Office had the opportunity to provide arguments to defend each view.

For further details please check our previous KPMG Alert here.

It became clear from the oral hearing that the Federal Fiscal Court did not yet have all the facts that would have enabled a decision to be made and that the facts of the case still need to be clarified further.  

Therefore, it is necessary to wait for the publication of the judgment´s reasoning which should be issued in three to four months, at the latest by August 2024.

We will continue to monitor the evolution of the case and update you on the next actions, once further details are available.

Should you have any questions/comments, do not hesitate to contact us.