New tax regulations for investment funds
Austria, France, Germany, Ireland, Luxembourg, Netherlands, United Kingdom, Switzerland
2013 was dominated by the changes triggered by the Alternative Investment Fund Managers Directive (AIFMD). Hence, this article mainly focuses on the amendments to regulations and the fiscal consequences of AIFMD for the taxation of investment funds.
Other amendments to the existing taxation rules for investment funds encompass regulations aimed at fine-tuning the tax assessment provisions, as well as correcting clerical errors in previous tax legislation.
In Luxembourg the AIFMD was transposed through the law dated 12 July 2013. The new law includes various tax and legal aspects not directly required by the directive, but which are aimed at strengthening Luxembourg's position as a fund centre for UCITS, as well as for alternative fund managers. The law includes the following measures:
Creation of the ‘special limited partnership’ (SCSp)
The draft law modifies the Law of 10 August 1915 on commercial companies, including:
- A modernisation of the legal regime applicable to common limited partnerships or SCS (Sociétés en Commandite Simple)
- A new vehicle, the special limited partnership or SCSp (Société en Commandite Spéciale)
Introduction of a new tax regime for carried interest
Aside from clarifying the Luxembourg tax regime applicable to carried interest paid to employees of AIF managers and to management companies of an AIF, the AIFM law introduces a beneficial temporary regime.
Broadening the VAT exemption scope for management services rendered to funds
Cross-border management of AIFs