Germany – Withholding tax changes for foreign investment funds

Published: 10 October 2017


The tax treatment of German stocks held by a foreign investment fund is due to change from 1 January 2018 following reform of the German Investment Tax Act.

A fund that obtains a “fund status certificate” will be able to obtain a reduced withholding tax rate of 15% at source on dividends. However, manufactured payments in respect of stock loans or repos over German stocks will become subject to withholding tax. Capital gains on German stocks which currently may be subject to tax if the foreign fund is not protected by a double tax treaty, will no longer be taxable.

For further information, please contact Paul Hale.