Abstract
The German Government has adopted a draft law relating to the introduction of stock exchange-listed real estate corporations, so called “REIT-AGs”. The bill is expected to become effective retroactively as of 1 January 2007.With the purpose of boosting the German real estate and financial sectors and enhancing the German economy's competitiveness in general, the bill will create a tax-transparent vehicle for indirect investments in immobile assets. In return for tax exemption at the corporate level, a minimum of 90 per cent of the company's profits will have to be distributed to shareholders by way of dividends with the regular tax rate of each individual shareholder applying. Fifty per cent of the profits resulting from the sale of real estate properties to a REIT-AG will be tax free within a period of three years from the REIT-law entering into force.The article introduces the draft law. It focuses on requirements relating to corporate structure and shareholding (eg, minimum free float and maximum shareholding) as well as on the taxation of the REIT-AG and its domestic and foreign shareholders.
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