New Funds Threshold

Changes in the European Savings Tax Directive: FAQs on the new funds threshold.

What happened with the funds on January 1, 2011?

The old threshold of 40% was reduced to 25%. Thus, EU taxation of interest will henceforth apply to redemptions/sales of funds with at least 25% invested in interest-bearing and non-grandfathered products.

Do the new thresholds replace the old ones?

No, the old thresholds (code 2 >15%&<=40%, code 3 <=40% and code 4 >40%) were deactivated but will remain visible for historical data. Three new codes, 7 (>15%%<=25%), 8 (<=25%) and 9 (>25%) have been created.

Can all funds be correctly switched over?

No, all funds with a percentage classification of >15%&<=40% or <=40% without a precise percentage were set to "Unknown". All others were reorganized using the new thresholds.

When must a new asset test or prospectus information be submitted?

Only if the current prospectus information shows a value of >15%&<=40% and/or the active asset test does not specify an exact percentage between 15% and 40%.

Has every fund been set to "Unknown" if the prospectus information showed a value of >15%&<=40%?

No. If an active asset test valid after December 31, 2010 shows an exact percentage, this percentage will always be used first for classification.

Have many funds been set to "Unknown"?

Roughly 2,500 prospectus information records and 600 asset tests have been set to "Expired".

What exactly has been reorganized on December 31, 2010?

  • All asset tests and prospectus information records with <=15% have remained unchanged.
  • All asset tests and prospectus information records with >40% (code 4) have received the new >25% (code 9) with everything else unchanged.
  • All prospectus information records with >15%&<=40% (code 2) and <=40% (code 3) have been set to “expired” (valid until December 31, 2010). If there is no active asset test available, the summary has been set to "Unknown". Valid from January 1, 2011.
  • All active asset tests with validity >December 31, 2010 and with >15%&<=40% (code 2) and <=40% (code 3) without an exact percentage will be set to “expired” (valid until December 31, 2010). If no valid prospectus information is available, the summary will be set to "Unknown". Valid from January 1, 2011. 
  • All active asset tests with validity >December 31, 2010 and with >15%&<=40% (code 2) and <=40% (code 3) with an exact percentage have been compared with the new threshold of 25%. Those between 15% and 25% have received either the new codes 7 or 8; those above 25% have received the new code 9. The summary has either remained unchanged or been switched over accordingly, effective as of January 1, 2011.