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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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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

 

Country-by-country reporting

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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