Alternative Financing Technologies: Is the KG Right for Your Shipping Company?

By Jürgen Salamon, Managing Partner, Dr. Peters Group, Dortmund, Germany

It is a great pleasure and an honour for me to introduce the Limited Partnership system and the latest developments within the German Limited Partnership system to you. Over the past years, it has not only been the major German Shipping Banks but also German Limited Partnership financiers who have achieved their share in the financing of international tonnage.

In order to understand the KG system one has to know and comprehend the German laws on taxation. The German tax system is deemed to be one of the most complicated and regulated systems in the world. For instance, we have to pay 53 % income tax, 9 % church tax, deducted at source by the State on behalf of the churches, we also pay 5.5 % solidarity contribution, which is a result of the reunification of Germany. On 3 June 2000, we had a special “Tax Payer Memorial Day”. This is a day, which is annually announced by the Association of Taxpayers. The day up to which, on average, all Germans will have solely worked in order to be able to pay their taxes to the Inland Revenue. This year this will be 153 days in total. However, it is to be noted that for those of who normally pay top revenue rates this number may easily amount to 220 working days work needed only to pay the tax they owe to the Inland Revenue.

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