The German government has released a draft statute that would amend various provisions of German tax law, particularly with regard to smaller businesses (Kleinunternehmerfrderungsgesetz). The draft includes provisions that clarify certain tax issues affecting securitizations in Germany.

The trade tax (Gewerbesteuer) treatment of special purpose entities used in true sale securitizations has been a major issue. Although offshore SPEs have not yet been subjected to German trade tax in practice, there has always been a certain risk that German tax authorities could assess trade tax against them, causing rating agencies to request coverage for the risk in many securitizations.

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