For immediate release: Friday 20 December 2002

German discriminatory taxation of investment funds

- EU start infringement proceedings

The Investment Management Association welcomes the European Commission’s recognition that existing German tax legislation on investment funds appears to be discriminatory and the fact that it has begun infringement procedures against Germany.  The Association particularly welcomes the Commission’s expressed concern that the German Government’s recently proposed Bill would extend that discrimination beyond taxation of dividends to capital gains tax.  

Sheila Nicoll, Deputy Chief Executive of the IMA, commented:

“While the Commission can only take action against existing discriminatory legislation, we cannot see how the German Government can now go ahead with its proposed new legislation which would amplify the discrimination between German and non-German funds.  If the existing legislation is not changed until 2004, as proposed by the German Government, the damage would already have been done, to the detriment of German investors, and it would look as if the German Government was taking unfair advantage of the time delays inherent in the Commission’s procedures.”

For further information, please contact: 

Sheila Nicoll, Deputy Chief Executive, IMA, 020 7831 0898

Clare Arber, Head of Communications, IMA, 020 7831 0898

Notes to Editors:

1.      Together with managers and their representative associations from throughout Europe, the IMA and eleven major investment management firms, active in the German investment funds market, are seeking to reverse proposed discriminatory legislation against non-German investment funds in Germany.  

2.      The eleven firms involved are; Fidelity Investment Services Ltd, Franklin Templeton Investments, Gartmore Investment Management Plc, Goldman Sachs Asset Management Europe, Henderson Global Investors, J P Morgan Fleming Asset Management Ltd, Jupiter International Group Plc, M&G International Investments Ltd, Merrill Lynch Investment Fund Managers Ltd, Schroders Investment Management Ltd, Threadneedle Investment Services Ltd.

3.      The German Government noted in a response to the Commission that it intended to review the discriminatory tax measures in 2004.

4.      The IMA’s earlier press release explains the situation in more detail.  

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Investment Management Association is a company limited by guarantee registered in England and Wales Registered number 4343737.  Registered office as above.