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Global Tax Compliance

Fund tax reporting is key for a cross-border fund distribution and is becoming the "hallmark" of fund administrations.

European context

Despite various harmonization initiatives in Europe, e.g. UCITS IV, fund tax reporting for investors is still a very long way behind. Germany, for example, requires the publication of specific accumulated income figures on a daily and yearly basis which have to be computed according to the German highly complex fund tax reporting framework, so that resident investors are taxed according to local tax regulation. Otherwise the investors are tax-penalized and have to pay an unfavourable lump sum.

Your challenges

The fund tax reporting requirements in Europe are one of the biggest challenges for fund administrations, promoters and management companies. Each distribution country requires different reporting figures (daily and annually), which leads to; highly complex tax computations for each jurisdiction, non-standardised reclassification of accounting figures/financial instruments and the interpretation of highly complex regulatory requirements.

The fund tax regimes of the main fund distribution markets requires significant efforts to fulfil intricate tax reporting requirements and reduce the risk of publishing incorrect daily and annual tax figures.

Currently up to ten times as many fund tax figures as NAVs have to be published per share class. Therefore it is time to take a different perspective on fund tax reporting.


"Daily" tax reporting figures
(260 business days)

Tax regime

Quantity

Complexity

Germany
4
High
Austria
1
High
Switzerland
N/A
N/A
Belgium
1
Medium
United Kingdom
N/A*
N/A
EUSD
1
Medium

* Possibly equalisation

"FYE" tax reporting figures

Tax regime

Quantity

Complexity

Germany
approx. 120
High
Austria
approx. 60
High
Switzerland
approx. 1
Medium
Belgium
N/A
N/A
United Kingdom
approx. 5
High
EUSD
N/A
N/A

"Interim distribution" tax reporting figures

Tax regime

Quantity

Complexity

Germany
approx. 120
High
Austria
approx. 4
High
Switzerland
N/A
Medium
Belgium
N/A
N/A
United Kingdom
N/A
N/A
EUSD
1
Low

Total tax figures per annum for one share class(260 business days)

Tax regime

260 NAVs

Germany
approx. 1,280
Austria
approx. 844
Switzerland
approx. 1
Belgium
approx. 260
United Kingdom
approx. 5
EUSD
approx. 261
 
Σ circa 2,600 tax figures
 

 

Contacts

Oliver Weber

Oliver Weber
Global Tax Compliance
Co-Leader

Tel: +352 49 48 48 3175

Marc Schernberg

Marc Schernberg
Global Tax Compliance
Co-Leader

Tel: +352 49 48 48 2142

Laurent Garzino

Laurent Garzino
Global Tax Compliance
Partner

Tel: +352 49 48 48 2018

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Global Tax Compliance