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17 September 2010

EFAMA/ KPMG’s European Investment Management practice UCITS IV report


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Der Bericht befaßt sich mit der Analyse der steuerlichen Auswirkungen der OGAW IV Richtlinie, die von den Mitgliedstaaten bis Juli 2011 umgesetzt werden soll, und verdeutlicht den breiten Spielraum zur Restrukturierung des Fondsmanagements in der EU.


The directive introduces six efficiency measures, which could make the European fund industry more competitive and attractive to investors. However, the directive does not deal with critical tax reforms required to enable effective use of the efficiency measures of the directive.
EFAMA and KPMG’s European Investment Management practice make a number of recommendations to resolve the tax barriers preventing an efficient single market:
·         Fund Mergers: Under UCITS IV it will be possible to carry out cross-border mergers of UCITS funds. Certain Member States currently tax fund mergers at the investor level, which leads to a situation where investors would pay taxes on unrealised gains. In order to make UCITS IV a success, the report recommends that fund mergers should be carried out in a tax-neutral manner at the fund and investor level.
·         Management Company Passport: UCITS IV will make it possible to establish a UCITS fund in one Member State which could be managed from another Member State. In this respect, the main issue is that in certain Member States, the management of a fund cross border could lead to a fund becoming tax resident (and therefore liable for tax) in the Management Company’s state of residence. The report recommends that the fund should only be taxable in the country where the fund is established or registered, even if its Management Company is resident elsewhere.
·         Master-Feeder Fund Structure: under UCITS IV, a Feeder fund will be allowed to invest its assets in another fund, a Master Fund. As it currently stands, certain Member States levy withholding taxes on cross-border dividend distributions to foreign Feeders, or impose tax on redemptions in the country where the Master Fund is located. The report recommends that there should not be tax leakage between the Master and Feeder fund in order for the Master–Feeder structures to become a reality and offer investors a cost effective product.
 


© EFAMA - European Fund and Asset Management Association

Documents associated with this article
Broch Main Report Implications of UCITS IV - web[1].pdf

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