Taxation of carried interest
Our experience in implementing CRD provisions on remuneration policies, combined with our fund industry knowledge, enable us to offer our clients tailor-made solutions for implementing the forthcoming AIFMD guidelines with regard to governance, risk management, human resources and tax optimisation.
Within the scope of the Draft Law of 24 August 2012 transposing the Alternative Investment Fund Manager Directive into Luxembourg Law (‘Draft Law’), the government decided to modernise the Luxembourg legal framework and introduce related tax provisions–specifically relating to the tax regime of carried interest–to enhance the position of Luxembourg as a centre of excellence.
The lack of explicit provisions in the current Luxembourg tax legislation regarding the treatment applicable to income or gains arising from a carried interest scheme was causing difficulties for the Luxembourg fund industry as well as giving rise to uncertainties.
While the Draft Law clarifies these tax uncertainties, the requirements set under the AIFM Directive in terms of remuneration policies will have to be respected when implementing a carried interest scheme.
Our services can be articulated through four dimensions:
- Aligning the AIFM’s remuneration policy with its business objectives and risk culture
- Reviewing and adapting , respectively, designing the AIFM’s remuneration governance and process
- Reviewing and adapting, respectively, defining the AIFM’s remuneration policy (including HR and tax optimisation aspects)
- Supporting the overall implementation/execution of the remuneration governance process