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Luxembourg Tax alerts
28 December 2020
On 19 December 2020, Luxembourg’s 2021 budget law was adopted by the Chamber of Deputies and it was published in the Official Journal on 23 December 2020.
Germany, France and Belgium cross-border personal tax and social security measures during the COVID-19 crisis: further extensions confirmed for 2021
23 December 2020
Since the start of the COVID-19 crisis in March 2020, many Luxembourg non-resident cross-border employees have worked from Home in Belgium, Germany or France.
Tax return filing extensions are welcome announcement in the current context
22 December 2020
On 21 December 2020, following Prime Minister Xavier Bettel’s speech in the context of the current COVID-19 situation, the Luxembourg Minister of Finance published a statement (in French only) extending the deadlines for the 2019 and 2020 individual and corporate tax returns.
Luxembourg tax authorities release Circular on how to apply the participation exemption regime to Gibraltar entities
3 December 2020
On 1 December 2020, the Luxembourg tax authorities released a Circular aiming to clarify the effects of this decision. The Circular foresees that the national provisions transposing the PSD will no longer apply to companies incorporated in Gibraltar as from 1 January 2021.
Agreement reached to amend the Luxembourg-Russia tax treaty on withholding tax rates for dividend and interest payments
13 November 2020
On 6 November 2020, Luxembourg and the Russian Federation signed a new amendment to the Luxembourg – Russia Income and Capital Tax Treaty in Moscow as amended.
Luxembourg draft 2021 budget law
16 October 2020
On 14 October 2019, Luxembourg’s Finance Minister presented the measures in connection with the 2021 budget law to the Chamber of Deputies.
Changes to EU blacklist affecting Luxembourg entities’ reporting requirements and tax measures
8 October 2020
On 6 October 2020, for the second time this year, the European Council revised the list of non-cooperative jurisdictions for tax purposes, aiming to improve tax good governance.
Germany, France and Belgium cross-border social security measures in response to the COVID-19 crisis extended to the end of 2020
18 August 2020
Since March 2020, Luxembourg nonresident cross-border workers, confronted with new ways of working, have had no other choice but to work from their homes. From mid-March 2020, EU Member States shared the view that the increased use of teleworking due to the COVID-19 crisis would not be taken into account when determining the applicable social security legislation.
Law implementing the decision to defer DAC6 reporting obligations and update of the DAC6 website of the LTA
31 July 2020
Luxembourg transposed Directive 2020/876 of 24 June 2020 by the law dated 24 July 2020, whereby it introduced a deferral of DAC6 reporting obligations by six months. Following this amendment, the Luxembourg tax authorities have provided some clarification on the deferral by updating their website dedicated to DAC6.
DAC 2/FATCA and CRS: Extended deadlines for the exchange of tax information in the context of the COVID-19 crisis
5 June 2020
On 4 June 2020, Luxembourg's Ministry of Finance confirmed that the proposal for a European Commission directive aimed at postponing certain deadlines for declaration and exchange of information in tax matters due to the COVID-19 pandemic has passed the final stages of approval, although this is yet to be formally published.
Decision to defer DAC6 reporting obligations by six months and relevant clarifications published
4 June 2020
Following a recent compromise, Member States may exercise the option to defer the DAC6 reporting deadlines by six months.
COVID-19: Mitigation measures within the EU Banking sector
9 April 2020
Dividend distributions, share buy-backs, and variable remuneration
Recommendations from the European Central Bank
On 27 March 2020, the European Central Bank (ECB) adopted a Recommendation on dividend distributions in response to COVID-19 (the “Recommendation”).
Luxembourg draft law: Temporary COVID-19-related measure creates deadline extensions for the approval, filing, and publishing of annual accounts, consolidated accounts, and related documents
2 April 2020
Following the recent publication of the Grand Ducal Regulation that authorizes the remote holding of AGMs and other management meetings (alert to be found here), the Luxembourg authorities released draft bill n°7541 on Friday 27 March 2020 to grant the possibility to prorogue or postpone the deposit and publication of annual accounts in derogation to the applicable rules.
Luxembourg introduces draft law as defensive measures in relation to the EU black list
2 April 2020
As from tax year 2018, the Luxembourg tax authorities have imposed specific reporting requirements in relation to transactions of Luxembourg companies with related enterprises located in jurisdictions that are included on the list of non-cooperative jurisdictions for tax purposes (the EU black list).
Grand Ducal Regulation of 20 March 2020: Measures concerning company meetings
24 March 2020
On Friday 20 March 2020, a Grand Ducal Regulation dealing with the introduction of special rules and measures governing the organization of shareholder, Board of Directors, or other supervisory and management body meetings was issued, published in the Official Journal of the Grand Duchy of Luxembourg, and immediately implemented into Luxembourg law.
DAC 6 law voted by the Luxembourg parliament
24 March 2020
On Saturday 21 March, the Chamber of Deputies organized an exceptional session where, among others, the draft law transposing EU Directive 2018/822, commonly referred to as DAC 6 (or the “tax intermediaries directive”) was voted into Luxembourg law.
Luxembourg implements new tax measures in response to the COVID 19 crisis
19 March 2020
Following Prime Minister Xavier Bettel’s speech of 17 March 2020 regarding the COVID-19 crisis, the Luxembourg government will implement a series of new measures for direct and indirect taxes.
Luxembourg Circular on Controlled Foreign Company published
10 March 2020
On 4 March 2020, the Luxembourg tax authorities issued a Circular n°164ter/1 (“Circular”) clarifying article 164ter of the Luxembourg Income tax law (“LITL”) on Controlled Foreign Company (“CFC”) rules. This provision was introduced by the law dated 21 December 2018 whose main purpose was to implement ATAD1 into Luxembourg domestic tax law.
Changes to EU black list affect reporting requirements for Luxembourg entities
19 February 2020
On 18 February 2020, the European Council revised the list of non-cooperative jurisdictions for tax purposes, whose objective is to improve tax good governance. The Council has included four more jurisdictions—Cayman Islands, Palau, Panama, and Seychelles—in annex I (“black list”), in addition to the eight jurisdictions already listed.
OECD releases report on transfer pricing of financial transactions
13 February 2020
The Organisation for Economic Co-operation and Development (OECD) on 11 February released final guidance on the transfer pricing aspects of financial transactions. The long-awaited release marks the first time the OECD transfer pricing guidelines (TPG) will be updated to include such guidance.
20 January 2020
The provisions covering exit taxation apply to fiscal years starting on or after 1 January 2020.
Law implementing ATAD 2 entered into force
6 January 2020
The Luxembourg law implementing the hybrid mismatch measures in ATAD 2 (2017/952 EU Anti-Tax Avoidance Directive) into domestic law was approved by the parliament and published on 23 December 2019.
Limitation of validity period of tax rulings issued before 1 January 2015 and guidance on how to renew them
3 January 2020
Luxembourg’s 2020 budget law, voted and published in the Official Journal, includes a new provision limiting the validity period of advance tax decisions (ATAs) issued by the Luxembourg direct tax authorities before 1 January 2015 to the end of fiscal year 2019.
Amendment to new Luxembourg-France tax treaty expected to apply from 1 January 2020
21 October 2019
On 10 October 2019, Luxembourg’s Minister of Finance and the French Minister of Economy and Finance signed an amendment to the new Luxembourg-France Tax Treaty, which was finalized on 20 March 2018 and which has since been ratified by both states.
Luxembourg releases the draft law implementing the EU directive (DAC 6) requiring the disclosure of certain cross-border tax arrangements
12 August 2019
On 8 August 2019, the draft law implementing the EU directive 2018/822, commonly referred to as DAC 6, was introduced to the Luxembourg parliament. The parliament will now debate, possibly amend and ultimately vote on the proposed text.
Luxembourg tax authorities release Circular L.I.R. n° 50ter/1 regarding new IP regime
4 July 2019
On 28 June 2019, the Luxembourg tax authorities released a circular relating to the new IP regime. The new regime is applicable as from the 2018 fiscal year.
Luxembourg 2019 budget in force as of 1 May 2019, MLI in force as of 1 August 2019
24 April 2019
April 2019 was a fruitful month in terms of Luxembourg tax laws. Two important laws are now ready to enter into force – namely, the ratified MLI and the 2019 budget law.
The European Banking Authority (EBA) published its report on high earners for 2017
21 March 2019
The EBA observes a slight increase of high earners in EU banks for 2017
MLI – expected entry into force in Luxembourg
20 February 2019
On 7 June 2017, Luxembourg signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI), along with representatives of 67 other jurisdictions.
About your 2018 Luxembourg tax return and 2019 tax card
28 January 2019
The tax authorities announced recently that the 2018 tax return forms will be available for download on their website as of 4 February 2019.
Married couples as well as non-resident taxpayers will need to consider for the first time the tax measures introduced by the 2017 tax reform.
Brexit: Immigration and social security rights for UK nationals – recent guidelines published by the Luxembourg government
23 January 2019
On 18 January 2019 the Luxembourg government published the guidelines for UK nationals in case of a Brexit agreement or no agreement concluded between the UK government and the European Union.
Luxembourg law transposing ATAD 1 voted and published in the Memorial
19 December 2018
On 18 December 2018, the Luxembourg Parliament voted on the transposition into Luxembourg law of the EU Anti-Tax Avoidance Directive of 12 July 2016 (ATAD 1).
14 December 2018
Impacts on the Luxembourg companies employing French tax residents.
Luxembourg coalition agreement: proposal of tax measures
6 December 2018
The coalition agreement between the three parties in the new government covers among others the tax measures envisaged by the new government for the five years to come (until 2023).
Four-year investigation finds no impermissible state aid was granted by tax rulings
21 September 2018
Following a four-year investigation, the European Commission concluded on 19 September 2018 that Luxembourg did not provide any impermissible state aid in the McDonald’s case.
Luxembourg Circular on virtual currencies
31 July 2018
On 26 July, the Luxembourg Tax Authorities published a new Circular on the topic of virtual currencies, providing useful clarifications on the tax treatment of income generated through virtual currencies, particularly in the scope of their creation or disposal.
CbC Reporting Newsletter - Amended list of CbC jurisdictions released by Luxembourg authorities
24 July 2018
On 10 July 2018, the list of jurisdictions subject to country-by-country (CbC) reporting was updated with an amended Grand-Ducal Regulation.
Luxembourg draft law ratifying the MLI published
6 July 2018
On 7 June 2017, under the framework of the OECD BEPS project, Luxembourg signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI), along with representatives of 67 other jurisdictions.
Luxembourg releases bill implementing anti-tax avoidance directive
20 June 2018
On 20 June 2018, the Luxembourg bill (the Bill) implementing the EU Anti-Tax Avoidance Directive dated 12 July 2016 (ATAD 1) was published. The ATAD 1 reflects some of the actions in the OECD’s base erosion and profit shifting (BEPS) project.
Defensive measures for EU list of non-cooperative countries and territories
9 May 2018
Last December, the Council of the European Union approved and published conclusions containing the European Union list of non-cooperative jurisdictions. The listed jurisdictions have been considered as not yet having provided effective actions in response to the European Union concerns.
Impact of revised tax treaty signed by France and Luxembourg on real estate investment structures
23 April 2018
On 20 March 2018, the governments of Luxembourg and France signed a new double tax treaty and its additional protocol (hereinafter together referred to as “the new DTT”) to replace the current agreement between the two countries.
VAT group: draft bill lodged with the Parliament
17 April 2018
On 16 April 2018 , the Luxembourg government has lodged with the Parliament the draft bill introducing the VAT group. Long awaited, this regime aims to avoid VAT on transactions between persons closely bound by financial, economic, and organizational links.
New tax treaty signed with France
23 March 2018
On 20 March 2018, the governments of Luxembourg and France signed a new double tax treaty and its additional protocol (hereinafter together referred to as “the new DTT”) to replace the 60-year-old agreement between the two countries. The text of the new DTT is currently only available in French.
23 March 2018
On 22 March 2018, the Luxembourg Parliament passed a law replacing the IP box regime that was abolished in 2016. The law voted is in line with the provisions of draft law n°7163 issued in August 2017.
New tax treaty between Luxembourg and France: 29 days rule
19 March 2018
On Friday 16 March 2018, the Luxembourg Ministry of Finance announced that a new double tax treaty with France will be signed in the upcoming days that will modernize the 60-year-old agreement between the two countries.
8 March 2018
List of CbC jurisdictions released by Luxembourg authorities
Tax card 2018 - Practical modalities for married taxpayers
23 January 2018
28 December 2017
A few days ago, some tax measures were approved by both the US House and Senate and signed by President Trump. The US tax reform includes a new tax rule relating to the sale of interests in partnerships by foreign persons in certain circumstances.
27 December 2017
Luxembourg’s 2018 budget law was approved by the parliament and officially published on 21 December 2017, with the tax measures applying as from 1 January 2018.
2018 Tax card for resident and non-resident taxpayer – last update and practical modalities
19 December 2017
The tax authorities have published a new tax alert on 19 December 2017 regarding the emission of 2018 tax card for both resident and non-resident taxpayer.
Updated Circular on the issuance by the Luxembourg tax authorities of certificates of tax residence for investment funds
13 December 2017
On 8 December 2017, the Luxembourg Tax Authorities (“LTA”) issued the updated Circular L.G.- A. n°61 which replaces the existing version of 12 February 2015 and provides an update on guidance rules on the issuance of certificates of tax residence for the benefit of Luxembourg investment funds as defined by the circular.
New tax regime of stock options in Luxembourg
30 November 2017
Following the Luxembourg draft 2018 Budget Law and the Law of 23 December 2016 implementing the 2017 tax reform, the Luxembourg Tax Authorities issued a new administrative circular concerning the tax regime of stock-option/warrant plans and the related reporting obligations towards the Luxembourg Tax Authorities.
CbC Reporting Newsletter - CbC - Annual Notification Season 2017
16 November 2017
Urgent Action: 2017 CBC Notification for clients closing their consolidated financials on 31.12 is due before 31.12.2017
Luxembourg draft 2018 Budget Law
17 October 2017
On 11 October 2017, Luxembourg’s Finance Minister, Pierre Gramegna presented the draft 2018 Budget Law to the Luxembourg Parliament.
CbC Reporting Newsletter - Luxembourg CbC Reporting platform launched
12 October 2017
On 9 October 2017, the Luxembourg Tax Authorities (LTA) launched the platform for the submission of the CbC Reports on MyGuichet.lu website.
2017 Individual Tax Reform – Non-resident taxpayer and individual taxation: new announcements and practical modalities
6 October 2017
Following the newsletter issued by the tax authorities on 3 October 2017 and following our previous tax alert, new guidelines regarding the taxation of non-residents and practical modalities for separate taxation and 2018 tax card have been published.
New BEPS-compliant IP regime open opportunities
8 August 2017
The Luxembourg Parliament published the draft law submitted by the Minister of Finance on 4 August on its website, which is intended to replace the so-called “IP Box” regime.
2017 Individual Tax Reform – Non-resident taxpayer and individual taxation: new adjustments
28 July 2017
During the press conference held by the Luxembourg government on 27 July 2017 on the tax reform applicable as of 1 January 2018, new adjustments on the non-resident tax regime and the individual taxation were confirmed.
OECD BEPS Multilateral Convention: Luxembourg’s choices published
9 June 2017
The OECD BEPS package contains tax-treaty related measures addressing gaps and mismatches in the application of tax rules in an international context. The implementation of these measures on tax treaties one-by-one could take decades to finalize.
2017 Individual Tax Reform – How to calculate tax credit for single parents and tax credit for employees: guidelines issued by Tax Authorities
12 April 2017
Following the 2017 Individual income tax reform applicable as from 1 January 2017, the Luxembourg tax authorities issued Circular letters on 7 April 2017 regarding the calculation of the tax credit for single parent households (CIM) and the tax credit for employees (CIS).
Final withholding tax on savings income: Circular of the Luxembourg Tax Authorities published
28 February 2017
On 27 February 2017, the Luxembourg tax authorities (Administration des contributions directes) issued a new Tax Circular concerning final withholding tax on savings income.
Director fees: Circular of the Luxembourg Tax Authorities published
21 February 2017
On 14 February 2017, the Luxembourg tax authorities (Administration des contributions directes) issued a new tax circular concerning fees paid to directors.
New tax measures to support Luxembourg as a prime financial center – New Group Finance Circular
28 December 2016
These new tax measures intend to ensure the sustainability of the group financing structures from a direct tax standpoint in order to continue to build a strong and long-lasting Luxembourg financial center.
CBC Reporting Newsletter - Luxembourg CBC Law published and first notification deadline extended!
27 December 2016
As part of BEPS Action 13, the Luxembourg law implementing Country-by-Country Reporting (CbC Report) was published in the official gazette today.
CBC Reporting Newsletter - Luxembourg CBC Law enacted before year end!
23 December 2016
As part of BEPS Action 13, the Luxembourg law implementing Country-by-Country Reporting (CbC Report) was adopted by the Parliament last week and will be published between Christmas and New Year’s Eve.
Country by Country Reporting notification in Luxembourg likely before year-end!
1 December 2016
As part of BEPS Action 13, the Luxembourg law implementing the Country-by-Country Reporting (CbC Report) is going through legislative process and may be voted in the coming weeks. The draft law implementing the EU directive partially inspired by the OECD Guidance, requires multinational enterprises (MNEs) having consolidated revenues of at least 750 million Euro to file a CbC Report as from FY 2016, to be reported by the end of 2017.
New TP Guidance inspired by BEPS action 8-10 published in Budget law 2017 on October 12, 2016
19 October 2016
5 August 2016
In the Declaration of Intent, the government intends to incorporate some conclusions (“des conclusions tirées dans le cadre des actions BEPS 8-10”) and basis criterions (des critères de base à respecter) drawn by the OECD under its BEPS initiative (action 8-10) into domestic law.
Draft law relating to 2017 tax measures available
27 July 2016
Following the February and April announcements in connection with the planned 2017 Luxembourg tax reform, the text of the draft law (n° 7020) relating to this reform was just submitted to the Luxembourg parliament. The Luxembourg parliament will now review this draft law, discuss and, if necessary, modify it before the approval.
The reform would impact many provisions of the Luxembourg tax law as from 2017 (for some measures as from 2016). The main tax measures that would affect companies and individuals are summarized below.
14 July The Reserved Alternative Investment Fund (RAIF) – A new and innovative vehicle to host alternative investment funds in Luxembourg and other legislative modernizations
The Luxembourg parliament voted on a law regarding the Reserved Alternative Investment Fund (Fonds d’Investissements Alternatifs Réservés - RAIF). This law, along with the law voted yesterday on the modernization of the law of 10 August 1915 on commercial companies as amended (the “Company Law”), both offer an attractive legal framework for different investors looking to structure their investments through Luxembourg.
Reduced tax rate on capital gains realized on sale of real estate (Temporary regime)
11 July 2016
1. Sale of real estate in Luxembourg
Capital gains arising from a real estate transaction involving one’s private wealth, under the condition that the property was held for more than 2 years, would fall to 25% of the global tax rate (i.e. circa 12%/12,5% maximum) for the period from July 1, 2016 to December 31, 2017.
2. Administrative procedures simplified for the joint taxation of spouses
So far, both members of jointly assessed couples would each receive a notification/letter from the Luxembourg tax authorities regarding any common decisions (tax assessment notice, etc).
U.S. and Luxembourg Announce Agreement to Adopt Exempt Branch Provision from 2016 U.S. Model Treaty
27 June 2016
Compromise reached by all Member States on anti-tax avoidance directive
22 June 2016
On 28 January 2016, the European Commission presented an anti-avoidance package to implement certain BEPS measures.
Public release of the European Commission’s State aid decision in Fiat Case
10 June 2016
On 11 June 2014, the European Commission opened a state aid investigation in connection with a 2012 tax ruling on transfer pricing granted by Luxembourg to Fiat Finance and Trade (“FFT”).
Public release of the European Commission’s State aid opening decision in McDonald’s
8 June 2016
On June 6th, the European Commission published its opening decision in connection with two Luxembourg tax rulings granted to a McDonald’s Luxembourg entity (McD Europe franchising S.à.r.l (Luxembourg): “McD Europe” in March and September 2009.
Updated plans for tax measures in Luxembourg 2017 budget announced
28 April 2016
On 26 April 2016, the Luxembourg Prime Minister, Xavier Bettel, summarized the country’s social and economic situation and presented the government’s policy plans for the next year.
Tax reform 2017: Luxembourg government announces planned measures
29 February 2016
The Luxembourg government has just announced on Monday 29 February measures for the 2017 tax reform. The announcements demonstrate that Luxembourg remains an attractive destination for international business whilst also reinforcing the purchasing power of individuals.
Implementation of the Luxembourg tax amnesty: a temporary safe way-out for Luxembourg taxpayers
26 February 2016
For a limited period of 2 years, starting as from the 1st January 2016 onwards, the Luxembourg tax administration offers the possibility for Luxembourg resident taxpayers to regularize their tax situation, by declaring up-to-now omitted income since 1st January 2006.
The European Commission’s new proposals against anti-tax avoidance and aggressive tax planning
1 February 2016
On 28 January 2016, the European Commission presented an anti-avoidance package in the current context of the implementation of BEPS measures. Here we have concentrated on two aspects of this package, the anti-avoidance proposal as well as the automatic exchange for Country-by-Country reporting between European Member States.
Regulatory and Tax Alert | The Reserved Alternative Investment Fund (RAIF) - A new and innovative vehicle to host alternative investment funds in Luxembourg
30 November 2015
On 27 November, the Luxembourg Government adopted a new draft law, for the purpose of creating a new type of alternative investment fund in Luxembourg: the Reserved Alternative Investment Fund (RAIF) (Fonds d’Investissements Alternatifs Réservés).
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