On February 18, the Economic Committee of the Federal Council discussed the Fund Location Act. The aim is to strengthen Germany as a location for funds by removing regulatory barriers. Overall, the growth conditions for Startups Bavaria's Minister of Economic Affairs, Hubert Aiwanger, welcomes the VAT exemption for the administrative services of venture capital funds provided for in the draft law. However, there is still room for improvement.
“The federal government must ensure the best conditions for growth”
Aiwanger and North Rhine-Westphalia's Minister of Economic Affairs, Andreas Pinkwart, are calling for an expansion of the law's scope. Older startups and scaleups up to 15 years old should also benefit from the new rules. Forms of participation such as share options and indirect investments must be taken into account, Aiwanger said. According to the proposals of the two economics ministers, deferred taxation of employee participation should only take effect after 15 years, and the annual, tax-free maximum amount for employee participation should be increased. Hubert Aiwanger says:
"Startups transform innovations into business ideas. Thanks to our nationwide digital incubators, future-proof jobs and new business models are created. Startups are therefore indispensable for an economy. The federal government must therefore ensure the best conditions for growth."
Bavaria's Finance Minister Albert Füracker recently made a similar request to the dpa:
"Especially after the Corona crisis, we need startups to be able to innovate. The creative minds need capital to do this."
Startup financiers should therefore be able to fully and unlimitedly deduct their investments from their tax deductions in the future. The Fund Location Act is expected to be passed by the Bundestag before the federal elections.
