EC take further steps against fund discrimination

The European Commission has taken another step in the campaign against discrimination against foreign funds in Europe, IMA says.

In its latest bid to make it easier for foreign funds to enter parts of the Germanic market, the Commission has sent official requests to Germany and Austria to end the tax discrimination against foreign investment funds.

Moving closer to the vision of a single market for asset management in Europe, the Commission has also sent a formal request for information to France.

This comes at the same time as Germany publishes its new tax law - designed to remove existing discrimination between domestic and overseas-registered funds.

In March, the German government dropped proposals to implement additional discriminatory tax laws that would have made it more expensive for German investors to buy foreign funds than domestic ones.

The Steuervergünstigungsabbaugesetz, or "law aiming to reduce tax benefits and exemptions" was abandoned after it was suggested that applying different tax rates in this way could be in breech of EU laws designed to remove barriers to trade between EU member states.

Deputy chief executive of the IMA Sheila Nicoll says:

"We're delighted that the Commission has taken these steps and look forward to a satisfactory conclusion. We are particularly pleased that the German Government has made clear its intention to abolish discrimination, and we look forward to other countries following suit.

National tax regimes shouldn't differentiate between domestic and offshore investment funds, as they inhibit the cross-border sale of investment funds."

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