Definitions

(1) The definitions of the Capital Investment Code apply accordingly, insofar as no differing definitions arise from this Act.
(2) A domestic investment fund is an investment fund subject to domestic law.
(3) A foreign investment fund is an investment fund subject to foreign law.
(4) An investment unit is the interest in an investment fund, regardless of the legal structuring of the interest or of the investment fund. A special investment unit is the interest in a special investment fund, regardless of the legal structuring of the interest or of the special investment fund.
(5) A fund-of-funds is an investment fund that holds investment units in another investment fund (target investment fund). A special fund-of-funds is a special investment fund that holds special investment units in another special investment fund (target special investment fund).
(6) Equity funds are investment funds that, under their investment conditions, continuously invest more than 50 per cent of their active assets in equity investments (equity fund equity-investment quota). A fund-of-funds is also an equity fund where the fund-of-funds is obliged, under its investment conditions, to invest in target investment funds in such a way that the equity fund equity-investment quota is continuously reached, and the investment conditions provide that the fund-of-funds relies, for compliance with the equity fund equity-investment quota, on the actual equity-investment quotas published by the target investment funds on each valuation day. The third sentence applies only to target investment funds that carry out a valuation at least once a week. At the point in time at which the investment fund materially infringes its investment conditions and thereby falls below the equity fund equity-investment quota, its status as an equity fund ends.
(7) Mixed funds are investment funds that, under their investment conditions, continuously invest at least 25 per cent of their active assets in equity investments (mixed fund equity-investment quota). A fund-of-funds is also a mixed fund where the fund-of-funds is obliged, under its investment conditions, to invest in target investment funds in such a way that the mixed fund equity-investment quota is continuously reached, and the investment conditions provide that the fund-of-funds relies, for compliance with it, on the actual equity-investment quotas published by the target investment funds on each valuation day. The third sentence applies only to target investment funds that carry out a valuation at least once a week. Subsection (6), fourth sentence applies accordingly.
(8) Equity investments are 1. interests in a corporation admitted to official trading on a stock exchange or listed on an organised market, 2. interests in a corporation that is not a real estate company and that a) is resident in a Member State of the European Union or in another contracting state to the Agreement on the European Economic Area and is subject there to income taxation of corporations and is not exempt from it, or b) is resident in a third country and is subject there to income taxation of corporations of at least 15 per cent and is not exempt from it, 3. investment units in equity funds to the amount of 51 per cent of the value of the investment unit, or 4. investment units in mixed funds to the amount of 25 per cent of the value of the investment unit. Where an equity fund provides, in its investment conditions, for a higher percentage than 51 per cent of its active assets for the continuous minimum investment in equity investments, the investment unit is, by way of derogation from the first sentence, no. 3, deemed an equity investment to the extent of that higher percentage. Where a mixed fund provides, in its investment conditions, for a higher percentage than 25 per cent of its active assets for the continuous minimum investment in equity investments, the investment unit is, by way of derogation from the first sentence, no. 4, deemed an equity investment to the extent of that higher percentage. In other respects investment units are not deemed equity investments. The following are also not deemed equity investments: 1. interests in partnerships, even where the partnerships hold interests in corporations or where the partnerships have opted for corporate taxation under section 1a of the Corporate Income Tax Act, 2. interests in corporations that are deemed real estate under subsection (9), sixth sentence, 3. interests in corporations that are exempt from income taxation, insofar as they make distributions, unless the distributions are subject to taxation of at least 15 per cent and the investment fund is not exempt from it, and 4. interests in corporations a) whose income is derived, directly or indirectly, to more than 10 per cent from holdings in corporations that do not satisfy the conditions of the first sentence, no. 2, or b) that directly or indirectly hold interests in corporations that do not satisfy the conditions of the first sentence, no. 2, where the fair market value of such interests amounts to more than 10 per cent of the fair market value of the corporations.
(9) Real estate funds are investment funds that, under their investment conditions, continuously invest more than 50 per cent of their active assets in real estate and real estate companies (real estate fund quota). Foreign real estate funds are investment funds that, under their investment conditions, continuously invest more than 50 per cent of their active assets in foreign real estate and foreign real estate companies (foreign real estate fund quota). Foreign real estate companies are real estate companies that invest exclusively in foreign real estate. Investment units in real estate funds or in foreign real estate funds are deemed real estate to the amount of 51 per cent of the value of the investment unit. Where a real estate fund or a foreign real estate fund provides, in its investment conditions, for a higher percentage than 51 per cent of its active assets for the continuous minimum investment in real estate, the investment unit is deemed real estate to the extent of that higher percentage. Interests in corporations, associations of persons or funds of assets in which, under statutory provisions or under their investment conditions, the gross assets consist to at least 65 per cent of immovable property, are deemed real estate to the amount of 65 per cent of the value of the interests, where the corporations, associations of persons or funds of assets are subject to income taxation of at least 15 per cent and are not exempt from it, or where their distributions are subject to taxation of at least 15 per cent and the investment fund is not exempt from it. Subsection (6), fourth sentence applies accordingly.
(9a) A property is not to be treated as real estate for the purposes of the real estate fund quota and the foreign real estate fund quota where the income from letting or leasing, or from the disposal, of the property is not subject to taxation or is exempt from taxation to more than 50 per cent. A holding in a real estate company or foreign real estate company that the investment fund holds directly or indirectly through partnerships is not to be treated as a real estate company or foreign real estate company for the purposes of the real estate fund quota and the foreign real estate fund quota where the income of the real estate company or foreign real estate company from letting or leasing, or from the disposal, of real estate is exempt from taxation to more than 50 per cent. The same applies where the income of the real estate company or foreign real estate company is attributed to the investment fund as its shareholder and this income is not subject to taxation or is exempt from taxation to more than 50 per cent.
(9b) The amount of the active assets is determined by the value of the investment fund's assets without taking into account the investment fund's liabilities. In place of the active assets, the investment conditions may refer to the value of the investment fund. In determining the extent of the assets invested in equity investments, in the cases of the second sentence, loans must be deducted in proportion to the share of the equity investments in the value of all assets. The third sentence applies accordingly to determining the extent of the assets invested in real estate.
(10) The investor is the person to whom the investment unit or special investment unit is attributable under section 39 of the Fiscal Code.
(11) Distributions are the amounts paid or credited to the investor, including the tax withheld on the capital income.
(12) The articles, the partnership agreement or comparable constituent legal instruments of an investment fund are also deemed investment conditions.
(13) The return, assignment, withdrawal or constructive contribution of investment units and special investment units to a corporation, as well as a completed winding-up or liquidation of the investment fund or special investment fund, are also deemed a disposal of investment units and special investment units.
(14) The concept of profit also includes losses from a legal transaction.
(15) A foreign state providing administrative and recovery assistance is a Member State of the European Union or a third country that 1. provides the Federal Republic of Germany with administrative assistance under the Mutual Assistance Directive within the meaning of section 2(2) of the EU Mutual Assistance Act or under comparable international agreements, and 2. supports the Federal Republic of Germany in the recovery of claims under the Recovery Directive within the meaning of section 2(2) of the EU Recovery Assistance Act or under comparable international agreements.
(16) Interests in partnerships that have opted for corporate taxation under section 1a of the Corporate Income Tax Act are not deemed, for the purposes of sections 26, 28 and 48, a holding in a corporation; the rules applicable to partnerships continue to apply.