BIO Deutschland Calls for Amendments to the Investment Taxation Reform
The biotechnology sector association BIO Deutschland has published a statement commenting on the Federal Government’s plans to reform investment taxation and calling for amendments to the planned taxation of capital gains from free float investments. The association also calls on the Federal Government to allow investors to combine tax relief for capital gains from venture capital investments with the Venture Capital Investment Grant, rather than these measures being mutually exclusive, as is the case in the Federal Ministry of Finance’s draft for discussion of 22 July. The aim of the amendment to the law must be to offset, rather than to reinforce, the discrimination against research-based biotechnology resulting from the corporate tax reform of 2008.
“We fundamentally welcome the Federal Government’s endeavours to reform investment taxation,” said Peter Heinrich, Chairman of the Board of BIO Deutschland. “However, the plan to tax capital gains from free float investments can only harm our sector. Business angels in particular often only hold less than ten per cent of a company’s share capital, and would thus be penalised. But they are extremely important investors, and it is often their commitment that makes it possible for companies to acquire further equity capital,” Heinrich added.
Dirk Honold, Co-Chairman of BIO Deutschland’s Working Group on Finance and Taxation, said: “We need to create more incentives for private investments in research and development. This is also the express aim of the Federal Government. However, a ban on combining the Venture Capital Investment Grant with tax relief for capital gains is counterproductive and extremely detrimental to all efforts to make the conditions for venture capital more attractive."
Apart from making concrete suggestions for amendments to the current draft for discussion, BIO Deutschland’s statement also lists further measures to promote private investments in innovative small and medium-sized enterprises, such as extending the Venture Capital Investment Grant to all innovative high-growth companies and introducing a German innovation fund.