On 1 July 2024, an amendment to the Investment Companies and Investment Funds Act (hereinafter referred to as the “Investment Act”) came into force. The amendment also includes an amendment to the Income Tax Act, which brings, among other things, the following changes:
New Types of Sub-funds
The amendment to the Investment Act allows to create sub-funds for some additional types of funds. The current wording of the Act defines only sub-funds of joint stock companies with variable share capital (SICAV). In the new wording of the Act, it will be possible to create sub-funds not only within SICAVs, but also within limited partnerships for investment and newly-defined joint stock companies with fixed share capital (SICAF).
With the amendment, all the above-mentioned sub-funds are considered to be taxpayers of corporate income tax.
Redefinition of an Investment Fund
The amendment changes the definition of an investment fund. In addition to investment funds, sub-funds of investment funds are now considered to be investment funds with a corporate income tax rate of 5 % if the shares of these sub-fund are listed on a European regulated market. This issue has been the subject of interpretive disputes in the past.
The other conditions for classification as an investment fund with a corporate income tax rate of 5% remain essentially unchanged. The main condition to be classified as an investment fund is investing 90 % of the assets under Section 17b of the Income Tax Act. A mutual fund continues to qualify as investment fund without any other conditions.
Depreciation of Tangible Assets
With the amendment to the ZISIF, tangible assets can now also be depreciated by a corporate income taxpayer who is not a legal entity. In practice, this means that, with the amendment, sub-funds will also become depreciators of tangible assets.
