The opening statements of our last articles in FYB 2022: Πάντα ῥεῖ — Everything flows! and “Little flows in the right direction!” (FYB 2022) may still be remembered by the inclined readers of the annual issues of the FYB Financial Yearbook. The background at the time was the increased and intensified preoccupation of the tax authorities with the taxation of private equity funds or the shareholders of private equity funds liable to tax in Germany and, above all, the frustration that the tax authorities had simply negated several unequivocal and landmark rulings of the highest German tax court, the Federal Fiscal Court (Bundesfinanzhof, BFH), for many years despite knowing better. Recently, a first breakout from this time loop seems possible. Has the tax authorities (finally) recognized the necessity and usefulness of private equity and venture capital and “fallen in love” with this asset class? — In the motion picture we regularly cite, “And Every Day is Groundhog Day,” it was Rita’s love, after all, that freed Phil Connors from his Groundhog Day loop in Punxsutawney.
For more than 26 years, our law firm has been dealing with a wide range of tax compliance issues for private equity funds and their (German) shareholders. In the run-up to writing this article, records of the 8th Munich Venture Capital Conference in 2004 fell into our hands more or less by chance.
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