The taxation of income from so-called "black" third-country funds in accordance with the Foreign Investment Act is constitutional.

Brief information from 11.12.2015:

The taxation of income from so-called "black" third-country funds in accordance with the Foreign Investment Act is constitutional.

In its ruling of 28 July 2015 (VIII R 2/09), the Federal Fiscal Court (BFH) ruled that it does not consider the lump-sum taxation pursuant to Section 18 (1) AuslInvestmG to be unconstitutional or contrary to EU law.

This regulation is therefore justified in its scope of application for income from investment funds domiciled in a third country and - in light of the ECJ's decision in the "Wagner-Raith" case (ECJ of 21 May 2015, C 560/13) - is also not to be measured against the free movement of capital (background: standstill clause of Art. 64 TFEU).

Although the BFH states that the flat-rate taxation of Section 18 (3) AuslInvestmG leads to unequal treatment, as it may violate the principle of taxation according to financial performance in individual cases, it is nevertheless covered by sufficient justification for the flat-rate taxation for funds domiciled in third countries. In the opinion of the BFH, the legislator is within its power of standardisation and flat-rate taxation with the standard, as it is pursuing a legitimate purpose that justifies the flat-rate taxation and the specific form of the standard is still within its scope of discretion.

In its judgements of 18 November 2008, the Federal Fiscal Court ruled that the provision of Section 18 (3) AuslInvestmG for funds domiciled in member states of the European Union violates the free movement of capital. The Federal Ministry of Finance responded to this in a letter dated 6 July 2009 and restricted the application of Section 18 AuslInvestmG to investment funds domiciled in third countries.