House Tax

The tax authorities must back row Media Fund… but only for the part. Investors face continued losses. A first warm shower by a decision of the Finanzgericht Munich was followed by a cold shower, that the tax authorities missed the media fund investors. Media funds were long considered wonderful tax shelter. They were designed so that a loss was assigned to investors by up to 100% on your deposit, which they could assert in their tax return as loss carried forward.

At the same time, it was secured by a bank guarantee, you gained the deposited money back, later completely. Many wanted to miss out is not, why Media Fund went like hotcakes. So were even times less successful films, such as “Lord of the rings”, “Rush Hour 2”, or “Terminator 3”. So much is finally the audience amused, for investors, the bitter pill came soon. Because the tax authorities not played just in the whole. Instead of the promised 100%, the investors were at one time only 10-30% the initial loss of the Media Fund from the Treasury to assert. Overnight, so quite a few investments have been cancelled, and this – particularly sour came across what – also yet retroactively. At one time, substantial tax arrears threatened investors.

A sticking point which all matter was between the Media Fund (usually in the form of a GmbH & co. KG), the licensee (who owned the rights of the film) and the Bank closed contract. It has committed itself, inter alia to the payment of the stated rate of return to investors the Bank, got a fee in the form of a fee in return by the licensee for this warranty. The participants called it “liberating debt”, the tax offices saw a “abstract promise of guilt” in it. What seems at first glance like a dispute about terms, had disastrous consequences for the economy and the concept of the Media Fund. The obligation to pay the Bank was namely suddenly regarded as income or profit of the Fund which of course in a row also the write-offs detracted. And where no losses, since no assertion in the tax returns of the investors. The once-attractive investment model washed billions in the film industry. Now, tax payments were the affected millions in the House. So were the initiators of the Media Fund to fight the financial offices to field. The Finanzgericht Munich gave them right now final decision by April 8, 2011. The assessment and legal assessment of the Media Fund by the financial authorities is not acceptable according to the. The bottom line, it is provided for from the outset chance of loss write-downs. A big “But” is however unavoidable. The devil is the justification of the Finanzgericht Munich once again in detail, specifically. Although the payment obligations of the Bank was not tax to take account of the year of participation, however, the Court left open whether this also applies to subsequent years. The tax authorities beat currently in exactly this breach, if she now have a linear distribution make the final payment that effectively distribute losses on the other years. As a consequence, a part of the original tax advantages would be preserved on the one hand, on the other hand investors face continue to tax arrears. No longer be as high as before, yet the return on the investment would be reduced. Media Fund clearly played out. by: Bernd Rechtsanwaltsgesellschaft mbH Holger Bernd lawyer Wilhelm-Weber-str.