...Low Tax-Risk Exposure: The majority of German securitisations should not be exposed to tax risk, in particular synthetic and true-sale loan securitisations without discounts. Leasing ABS and/or transactions where receivables are purchased at a discount may however be affected by German corporate income, trade and/or value-added tax (VAT). Fitch is not aware of a German financial authority having ever determined a securitisation SPV as being taxable in Germany. However, due to the absence of precedents and clear guidance from tax authorities, these risks cannot be neglected. Tax Residency Determining Factor: Both German and foreign SPVs may be taxable in Germany. The place of effective management, which determines tax residency, may not be seen as resting with the legal manager or the shareholder of the SPV. Permanent Establishment of SPV: Tax authorities may deem the place of effective management to rest with the sponsor or the servicer, which may constitute a permanent establishment (PE)...
