Global X’s data centre REIT ETF is no longer classified as an equity fund meaning investors will lose the benefit of partial tax exemption.
The $3.4m Global X Data Center & Digital Infrastructure UCITS ETF (VPN) tracks the Solactive Data Center REITs & Digital Infrastructure v2 index which primarily offers exposure to real estate investment trusts (REITs).
However, some REITs do not classify as equities under the German Investment Tax Act.
In a shareholder notice, Global X said it would not be able to provide evidence that VPN’s underlying exceeds the equity ratio threshold required to benefit from tax benefits.
Under the partial exemption system, 30% of income generated from equity funds is tax-exempt for private investors, life and health insurance companies and banks holding units of their trading books.
Global X added the change “affects both retrospective and prospective financial outcomes” for investors in VPN with tax residency in Germany.
The news comes six months after investors in the WisdomTree New Economy Real Estate UCITS ETF (WTRE) also lost partial tax exemption benefits after the ETF ceased being classified as an equity fund.
WTRE tracks the CenterSquare New Economy Real Estate UCITS index to offer exposure to equities and REITs.
