German tax law currently recognises an exit tax for shares in corporations: if a person with unlimited tax liability in Germany holds a stake of at least 1% in a corporation, the law presumes that these shares have been sold under certain conditions if the taxpayer moves the centre of their life abroad. The consequence of this fiction is that the taxpayer must pay tax on a fictitious capital gain, even if he does not receive any liquidity.
In future, the legislator would like to extend this exit tax to shares in an investment fund. It is to apply if the „exit investor“ holds shares in an investment fund as part of their private assets and
- the shareholding was directly or indirectly at least 1% within the last five years before the sale; or
- the acquisition costs of the investment units held directly or indirectly at the time of departure exceed EUR 500,000.
The exit tax only applies to gains; losses from the fictitious sale are not taken into account (i.e. there is no tax refund on fictitious losses).
The new regulation, which represents a drastic deterioration in the previous legal position of investors, is to apply to „departures“ after 31 December 2024.