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 />
agreement). However, investors that are not incorporated<br />
entities are subject to the progression clause.<br />
If, exceptionally, the tax credit method has been agreed in the<br />
relevant double taxation agreement or no double taxation<br />
agreement has been signed, income tax paid in the relevant<br />
countries of origin may be offset against German income tax<br />
or corporation tax where appropriate, insofar as the taxes<br />
paid have not already been claimed as income-related<br />
expenses at the level of the Investment Fund.<br />
Tax need only not be withheld, or withheld tax can only be<br />
refunded, upon presentation of a corresponding nonassessment<br />
certificate. Otherwise, the investor receives a tax<br />
certificate documenting the tax withheld.<br />
Gains on the sale of securities, gains on transactions<br />
forward and income from option premiums<br />
Gains on the sale of shares, equity-equivalent profit participation<br />
rights and investment fund units, gains on forward<br />
transactions and income from option premiums are of no<br />
significance for tax purposes at the investor level if they are<br />
retained.<br />
If they are distributed, they are taxable at the investor level.<br />
Gains on the sale of shares are fully tax-free for investors that<br />
are corporations (5% of the profits are considered as nondeductible<br />
business expenses) or 40% tax-free for other<br />
business investors such as sole proprietorships and partnerships<br />
(partial income method).<br />
In contrast, disposal gains on bonds/capital claims, gains on<br />
forward transactions and income from option premiums are<br />
fully taxable.<br />
Income from the sale of capital claims that are not included<br />
in the list above must be treated in the same way as interest<br />
for tax purposes (see above).<br />
Distributed disposal gains on securities, distributed gains on<br />
forward transactions and distributed income from option<br />
premiums are subject to withholding tax (25% investment<br />
income tax plus the solidarity surcharge). This does not apply<br />
to gains on the sale of securities purchased before 1 January<br />
2009 and to gains on forward transactions entered into before<br />
1 January 2009. However, the paying agent does not<br />
withhold any tax in particular if the investor is a corporation<br />
with unlimited tax liability or if the investment income represents<br />
operating income of a domestic business and this is<br />
declared to the paying agent by the creditor of the investment<br />
income in an official form.<br />
Domestic and foreign dividends (particularly from real<br />
estate corporations)<br />
40<br />
Dividends paid by domestic and foreign real estate corporations<br />
that are distributed or retained in relation to units held<br />
as business assets are tax-free for corporations with the<br />
exception of dividends in accordance with the REIT-Gesetz<br />
(German REIT Act) (5% of dividends are considered as<br />
non-deductible business expenses). This income is taxable<br />
at 60% for sole proprietorships or natural persons holding<br />
equity interests in commercial partnerships (partial income<br />
method).<br />
Domestic dividends are subject to withholding tax (25%<br />
investment income tax plus the solidarity surcharge).<br />
Foreign dividends are generally subject to withholding tax<br />
(25% investment income tax plus the solidarity surcharge).<br />
However, the paying agent shall not withhold any tax in<br />
particular if the investor is a corporation with unlimited tax<br />
liability (whereby corporations as defined by section 1(1) no.<br />
4 and 5 of the Körperschaftsteuergesetz (KStG – German<br />
Corporation Tax Act) must submit a certificate from their tax<br />
office to the paying agent) or the foreign dividends represent<br />
operating income of a domestic business and this is declared<br />
to the paying agent by the creditor of the investment income<br />
in an official form.<br />
Subject to certain conditions, dividends paid by foreign (real<br />
estate) corporations may, as qualifying intercompany<br />
dividends, be fully tax-free.<br />
Negative taxable income<br />
If, after negative income has been offset against similar<br />
positive income at Investment Fund level, a negative overall<br />
amount is produced, this is carried forward at Investment<br />
Fund level. It can be offset against similar future positive<br />
taxable income at Investment Fund level in subsequent periods.<br />
Negative taxable income may not be directly allocated to<br />
investors. This means that such negative amounts will only<br />
be reflected in investors’ income or corporation tax assessments<br />
in the assessment period (tax year) in which the<br />
Investment Fund’s financial year ends, or in which the<br />
distribution for the financial year of the Investment Fund for<br />
which the negative taxable income has been offset at Investment<br />
Fund level takes place.<br />
Repayments of capital<br />
Repayments of capital (e.g. in the form of construction<br />
project interest) are not taxable.<br />
Capital gains at investor level<br />
Gains on the sale of units held as business assets are tax-free<br />
for business investors, provided that these consist of foreign<br />
rental income that has not yet accrued or been deemed to