News on the commercial nature of the purchase of non-performing loans

When setting up fund structures, it is important to consider from a tax perspective whether the fund generates income from capital assets or commercial income. This is because while income from capital assets is taxed at the flat-rate withholding tax rate, income from commercial operations is subject to progressive taxation and trade tax. In its ruling of 30.11.2023, the BFH decided that the sustainable purchase of non-performing loans does not automatically constitute an original commercial activity. “A pleasingly clear and convincing ruling with many helpful pointers for day-to-day work with debt funds,” say POELLATH professionals Carolin Stehr and Raphael Baumgartner.