Future Financing Act: VAT Exemption for Management of All Alternative Investment Funds

• The Future Financing Act extends the VAT exemption to all investment funds in Germany.
• The VAT exemption will apply to the management of all Alternative Investment Funds (AIF), including private equity, venture capital, real estate, infrastructure, and crypto funds.
• The exemption will be effective from 1 January 2024 and will no longer require comparability with Undertakings for Collective Investments in Transferable Securities (UCITS) or qualification as a venture capital fund.
• The VAT exemption only applies to the management of the fund, not to other administrative services.
• Fund managers must review their activities to determine if they qualify as fund “management” and invoice their services without VAT.
• Fund managers will no longer be entitled to deduct input VAT for VAT exempt supplies.
• Lease agreements for fund managers may need to be reviewed for information obligations, compensation obligations, or rent increases due to the VAT exemption.

Source: kmlz.de

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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