Merger of investment funds

(1) Where domestic investment funds are merged with one another under sections 181 to 191 of the Capital Investment Code, 1. the transferring investment fund must apply, to the assets and liabilities to be transferred that form part of the net asset value, the acquisition cost less deductions for wear and tear or depletion (continued acquisition cost), as at the end of its financial year (transfer date), and 2. the acquiring investment fund must apply, to the assets and liabilities acquired, the continued acquisition cost as at the beginning of the day following the transfer date. A transfer date determined under section 189(2), first sentence of the Capital Investment Code is deemed the end of the financial year of the transferring investment fund.
(2) The acquiring investment fund succeeds to the tax position of the transferring investment fund.
(3) The issue of units in the acquiring investment fund to the investors of the transferring investment fund is not deemed an exchange. The units acquired in the acquiring investment fund take the place of the units in the transferring investment fund. Where the investors of the transferring investment fund receive a cash payment under section 190 of the Capital Investment Code, this is deemed income under section 16(1) no. 1.
(4) Subsections (1) to (3) also apply to the merger of foreign investment funds with one another that are subject to the same law of a foreign state providing administrative and recovery assistance.