Germany: New tax relief gives hope to market for 2010
01 April 2010
It is reassuring that the legislature has come up with tax relief measures to support companies in managing the crisis, although the new provisions are not exhaustive, explain Michael Hartmann, Klaus Schmidt and Christian Tempich of PricewaterhouseCoopers
The year 2009 was a year of challenge and change for private
equity as well as M&A in Germany. Indeed, it can be
considered as a landmark year for portfolio restructuring.
However, there is cautious optimism about a recovery in the
European M&A market in 2010. Nevertheless, portfolio
restructuring and negotiations with financiers will probably
continue in the next 12 months. Besides dealing with difficult
trading conditions at portfolio companies and a likely dearth
of willing sellers and financiers for new transactions, private
equity also needs to manage a variety of other challenges such
as changes in the traditional business model, investor actions
to address fund performance, increasing focus on risk
management and sustainability issues. In addition, it also
needs to manage the demands of increased regulation and
Recently, a new Act has been promulgated in Germany, aiming
to introduce the specific tax relief measures envisaged
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