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Luxembourg Tax alerts

Tax alert is issued on a regular basis highlighting the latest key tax developments in Luxembourg.

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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 law set to establish an aid scheme for enterprises in temporary financial difficulty due to the COVID-19 emergency

2 April 2020

On 13 March 2020, in response to the current COVID-19 emergency, the Luxembourg government introduced a draft law (Draft Law n. 7532) seeking to provide an aid scheme for companies in temporary financial difficulty.

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.

New Luxembourg exit tax rules

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 releases draft law implementing ATAD 2 rules on hybrid mismatch arrangements

9 August 2019

On 8 August 2019, Luxembourg published the draft law that would implement hybrid mismatch measures of the 2017/952 EU Anti-Tax Avoidance Directive (ATAD 2) into Luxembourg domestic law.

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

2019 Budget

7 March 2019

On 5 March 2019, Luxembourg’s Finance Minister, Pierre Gramegna presented the draft 2019 Budget Law, together with the draft law on multiannual financial planning, for the 2019-2022 period to the Chamber of Deputies.

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).

New French withholding tax

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.

Luxembourg new IP box voted

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.

CbC Reporting 

8 March 2018

List of CbC jurisdictions released by Luxembourg authorities

Tax card 2018 - Practical modalities for married taxpayers

23 January 2018

US Tax Reform 

 

2018 Budget Law approved 

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 Budget Law approved 

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. 

 

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