The taxation of cross-border fund mergers in the EU - The taxation of German investors in a French investment fund that is merged into a Luxembourg fund
Prokopp, Emma Sophie (2024)
2024
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2024090824862
https://urn.fi/URN:NBN:fi:amk-2024090824862
Tiivistelmä
Under § 23 Abs. 4 InvStG, mergers of investment funds are generally taxexempt for German investors. In such cases, no exchange transaction occurs, and the units of the acquiring fund simply replace those of the transferring fund. However, cross-border mergers of investment funds, even within the EU, are excluded from this exemption, and the tax authorities consider them as taxable events, which can place a great burden on German investors. This raises critical questions, not only about the potential applicability of alternative tax relief provisions for investors but also regarding the justification for excluding cross-border mergers from the tax exemption under § 23 InvStG in light of the principle of equality and the free movement of capital.
The purpose of this paper is to analyze the interplay between §§ 23 InvStG, 20 Abs. 4a EStG, and 13 UmwStG to evaluate the tax implications for German investors in a French investment fund that merges into a Luxembourg investment fund. The competitive relationship between these statutes shows that neither § 23 InvStG nor § 20 Abs. 4a EStG applies to the crossborder merger of investment funds under the current legal framework. The applicability of § 13 UmwStG to cross-border mergers depends on the legal form of the investment funds and whether the foreign transaction closely resembles a domestic merger. Especially problematic is the comparability of the legal form of the French investment fund with a German legal entity eligible for the applicability of the UmwStG.
A potential violation of Art. 3 GG may arise from the unequal taxation of German investors involved in cross-border fund mergers compared to those involved in domestic or foreign fund mergers. Especially as the disparity is lacking a substantive justification provided by the legislator. Moreover, the different tax treatment may constitute a breach of the free movement of capital, as any impediment to capital flows is considered an infringement of this fundamental freedom of the EU. Nonetheless, restrictions on the free movement of capital can be justified under certain conditions if objectively valid reasons are presented.
The purpose of this paper is to analyze the interplay between §§ 23 InvStG, 20 Abs. 4a EStG, and 13 UmwStG to evaluate the tax implications for German investors in a French investment fund that merges into a Luxembourg investment fund. The competitive relationship between these statutes shows that neither § 23 InvStG nor § 20 Abs. 4a EStG applies to the crossborder merger of investment funds under the current legal framework. The applicability of § 13 UmwStG to cross-border mergers depends on the legal form of the investment funds and whether the foreign transaction closely resembles a domestic merger. Especially problematic is the comparability of the legal form of the French investment fund with a German legal entity eligible for the applicability of the UmwStG.
A potential violation of Art. 3 GG may arise from the unequal taxation of German investors involved in cross-border fund mergers compared to those involved in domestic or foreign fund mergers. Especially as the disparity is lacking a substantive justification provided by the legislator. Moreover, the different tax treatment may constitute a breach of the free movement of capital, as any impediment to capital flows is considered an infringement of this fundamental freedom of the EU. Nonetheless, restrictions on the free movement of capital can be justified under certain conditions if objectively valid reasons are presented.