U.S. private equity and venture capital funds with German investors have an additional 6 months to file German partnership returns for 2019.
Taxpayers with filing obligations in Germany should keep in mind that on Feb. 19, 2021, Germany extended the deadlines for income tax return filings granting an additional six months to file. German income tax returns, including partnership returns of U.S. private equity (PE) funds with German investors are now due by Aug. 31, 2021 (originally Feb. 28, 2021). The application of the extended deadline is limited to all income tax return filings relating to the tax year 2019. Moreover, interest on open tax payments relating to the tax year 2019 will be waived for six months and charged as of Oct. 1, 2021 (originally April 1, 2021).
If a U.S. PE or venture capital (VC) fund is organized as a partnership, and has at least two German tax resident investors, the annual filing of a partnership return in Germany is required. By law, German investors, and the fund’s management, are jointly liable for the proper filing of the return. The return includes a profit determination according to German tax laws. Financial statements based on U.S. GAAP or other accounting principles need to be converted into German GAAP for this purpose. For more information about the filing obligation see Germany imposes requirements for PE and VC funds with German investors.