Bouwfonds European Residential - Catella Real Estate AG
Bouwfonds European Residential - Catella Real Estate AG
Bouwfonds European Residential - Catella Real Estate AG
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Tax Information<br />
€0.37 per unit will be distributed on 3 August 2009 for the<br />
financial year ended 30 April 2009.<br />
Taxation at fund level<br />
In Germany, investment funds are legally exempt from all<br />
income taxes. Income is taxed at the level of the investors.<br />
Taxation at private investor level<br />
If the units are held as private assets, taxable income from<br />
the Fund is treated as income from capital investments. This<br />
also includes the income distributed by the Investment Fund,<br />
deemed distributions and interim profits, as well as gains on<br />
the purchase and sale of fund units if these were or are<br />
purchased after 31 December 2008. This income is taxed in<br />
the year it accrues.<br />
Income from capital investments is subject to 25% withholding<br />
tax (plus solidarity surcharge and, if applicable,<br />
church tax). As the tax withheld is generally definitive (flat<br />
tax), income from capital investments does not, as a rule,<br />
have to be disclosed in the investor’s income tax return.<br />
When withholding the tax, the custodian, as a matter of<br />
principle, already offsets any losses and credits any foreign<br />
withholding taxes.<br />
Nevertheless, the tax withheld may not have definitive effect<br />
in some circumstances, e.g. if the investor’s personal tax rate<br />
is lower than the flat tax rate of 25%. In this case, income<br />
from capital investments can be disclosed in the investor’s<br />
income tax return. The tax office then applies the lower personal<br />
tax rate and counts the tax withheld against the investor’s<br />
personal tax liability (Günstigerprüfung – most<br />
favourable tax treatment).<br />
If no tax has been withheld on income from capital investments<br />
(for example because a gain on the sale of fund units<br />
is generated in a foreign securities account), this income<br />
must be disclosed in the tax return. This income from capital<br />
investments is then also subject to the 25% flat tax rate or<br />
the lower personal tax rate in the course of the assessment.<br />
Even if the tax has been withheld and the investor has a<br />
higher personal tax rate, information on income from capital<br />
investments must be disclosed if, for example, extraordinary<br />
personal expenses or special personal deductions (e.g.<br />
donations) are claimed in the investor’s income tax return.<br />
No tax needs to be withheld if the investor is a German tax<br />
38<br />
resident and has submitted an exemption instruction,<br />
provided that the taxable income components do not exceed<br />
EUR 801 for single persons or EUR 1,602 for married couples<br />
assessed jointly. The same also applies if a non-assessment<br />
certificate has been submitted or if foreign investors furnish<br />
proof of their non-resident status for tax purposes.<br />
Distributed or retained domestic rental income, interest,<br />
other income, foreign dividends and gains on the sale of<br />
domestic real estate within the 10-year holding period that<br />
are held in domestic custody are subject to the 25% withholding<br />
tax (plus solidarity surcharge and, if applicable,<br />
church tax).<br />
If units are held in an investment fund classed as an accumulating<br />
fund for tax purposes, the Investment Company<br />
itself remits the 25% tax (plus solidarity surcharge) withheld<br />
on the retained income that is subject to tax. Thus, the issue<br />
and redemption prices for the fund units are reduced by the<br />
tax withheld at the end of the financial year. As investors are<br />
generally unknown to the investment company, church tax<br />
cannot be retained in this case; as a result, investors who are<br />
subject to church tax must disclose the corresponding information<br />
in their income tax return.<br />
Gains on the sale of domestic and foreign properties not<br />
falling within the 10-year holding period<br />
Gains on the sale of domestic and foreign properties not<br />
falling within the 10-year holding period that are generated at<br />
the Investment Fund level are always tax-free for the investor.<br />
Foreign rental income and gains on the sale of foreign<br />
properties within the 10-year holding period<br />
Foreign rental income and gains on the sale of foreign<br />
properties in respect of which Germany has waived taxation<br />
under a double taxation agreement (exemption method) are<br />
also tax-free (general rule). The tax-free income also has no<br />
effect on the applicable tax rate (i.e. Progressionsvorbehalt<br />
– progression clause – does not apply).<br />
If, exceptionally, the tax credit method has been agreed in the<br />
relevant double taxation treaty or no double taxation treaty<br />
has been signed, the statements made regarding the treatment<br />
of gains on the sale of domestic real estate within the<br />
10-year holding period shall apply analogously. Taxes paid in<br />
the relevant countries of origin may be offset against German<br />
income tax where appropriate, insofar as the taxes paid<br />
have not already been claimed as income-related expenses at<br />
the level of the Investment Fund.<br />
Gains on the sale of securities, gains on forward transactions<br />
and income from option premiums