BFH confirms tax treatment of carried interest as profit allocation

In its decision dated April 16, 2024 (VIII R 3/21), the German Federal Fiscal Court (“BFH”) confirmed that carried interest is part of a profit allocation for German tax purposes and is not a hidden service fee that is deemed to be paid by the investors to the carry partnership. The BFH thus confirmed the legal opinion of the plaintiff, but for procedural reasons, however, the case was referred back to the competent Munich tax court. Read more about the details.