On 15 November 2024 the Federal Ministry of Finance (MoF) has published the draft of an explanatory circular on various issues relating to the tax treatment of fund establishment costs and has sent a corresponding draft circular to certain associations to comment by 12 December 2024.
In response to an earlier judgment of the Supreme Tax Court of 26 April 2018 (case: IV R 33/15) the Act on the Further Tax Promotion of Electric Mobility and the Amendment of Further Tax Regulations (Finance Act 2019 – “FA19”) provided for the introduction of a new provision according to which fund establishment costs to be paid by the investor in connection with the acquisition of a fund unit are to be retroactively allocated to the acquisition costs of the assets acquired by the fund and are therefore not to be immediately deductible in full as operating expenses or income-related expenses (Section 6e Income Tax Act). They must be capitalized as acquisition costs of the investment objects if the initiator of the fund provides a pre-formulated contract, and the investors have no significant influence on this in their corporate affiliation.
