The so-called Act to Strengthen Germany as a Fund Jurisdiction added an exemption to the German VAT Act from VAT for management services rendered to “venture capital funds” (Wagniskapitalfonds) with effect from 1 July 2021. To date, however, it has been largely unclear how the tax authorities interpret the term “venture capital fund” (Wagniskapitalfonds), which is not defined by law, and what type of funds are to be covered by this new VAT exemption.
Now, the Federal Ministry of Finance (BMF) has published a draft of the long-awaited supplement to the German VAT Regulations. Below we summarize material points regarding the definition of the term “venture capital funds” from the draft regulations.
Source: mondaq.com
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