This new edition of our quarterly tax update is dedicated to the main changes which have occurred over the last 3 months with regard to Luxembourg and international tax law.
The topics of this update are: Luxembourg news: Bill of Law No. 6826 on the ratification of the 4th amendment to the tax treaty between France and Luxembourg - Grand-Ducal decree on the notification of tax assessments - Case law on transfer pricing (case No. 34024C dated 26 March 2015) - International news: Protocol to the Agreement between the European Union and Switzerland on taxation of savings income - Proposal of the Council of the European Union for the repeal of Directive 2003/48/EC on savings income - Case law on the VAT treatment applicable to service charges passed on by the landlord to the tenant within the context of a property lease agreement (Case C-42/14 dated 16 April 2015) - Case law on the refusal to refund VAT to the supplier of services when the services recipient is refused the right of deduction (Case C-111/14 dated 23 April 2015) - Opinion of the Advocate General on the scope of application of the fund management VAT exemption within the context of real estate investments (Case C-595/13 dated 20 May 2015) - Useful information: Double Tax Treaty Network - Extension of the first reporting deadline under FATCA - Bill of Law No. 6713 on VAT free zone regime - New Bill of Law introducing new tax measures and transposing EU Directives amending the EU Parent-Subsidiary DirectiveTo download the update, please click on the following link :
As anticipated in our Tax Update (April 2015), in the case “Fiscale Eenheid X NV cs” C-595/13, the Advocate General of the Court of Justice of the European Union (“CJEU”) proposed in its conclusions rendered on 20 May 2015 to further define the scope of the VAT exemption applicable to the management of collective investment funds.
Should you wish to read the full newsflash, please click on the link below:
Une « holding de direction » est-elle limitée dans son droit à déduction de la TVA ?Dans Agefi Luxembourg, Bruno Gasparotto et Sophie Weyten nous en disent plus sur les règles actuelles de déduction au Luxembourg pour les holdings/assujettis partiels.Pour lire l'article complet, veuillez cliquer sur le lien ci-dessous.
When you think of Luxembourg, the first idea that comes to mind is perhaps the monarchy, the Grand Ducal Family or the importance of the financial sector. However, our country is marked by a strong and continually developing entrepreneurial spirit.
In this third issue, we will explore this spirit which is an advantage and a real vector of development. Discover Luxembourg’s key advantages for companies considering locating their business here, in order to establish an international basis, as well as examples of diverse successful companies and insight into Luxembourg’s legal regime for enterprises.
Furthermore, we will continue to share updates and our vision in relation to topics which make news in the legal, corporate and economic fields.
We hope you will enjoy reading this new issue!
- PRIVATE WEALTH
Private foundations: meeting the wealth management needs of tomorrow
- EUROPEAN LONG-TERM INVESTMENT FUNDS REGULATION
A new product added to the Luxembourg fund structuring toolbox
- PRIVATE EQUITY
The Luxembourg Limited Partnership: A quantum leap
- COVER STORY
Luxembourg: empowering entrepreneurs
Luxembourg law experts at your door in London
- ARENDT SERVICES
Tax Compliance cannot be improvised
- ARENDT REGULATORY SOLUTIONS
A unique business consulting model in Luxembourg
- ARENDT INSTITUTE
- MEET ARENDT
Meet Arendt around the world in the coming months
This new edition of our quarterly tax update is dedicated to the main changes which have occurred over the last 3 months with regard to Luxembourg and international tax law. The topics of this update are: Luxembourg news - Budget law for 2015 and the law introducing measures for the future (“paquet d’avenir”) - Law abolishing the withholding tax system under the EU Savings Directive - Law on the annual establishment of net worth tax and the recovery of tax claims - New Circular Letter on certain benefits-in-kind granted to employees - Case law on the exchange of information – foreseeable relevance of an exchange of information request (Case No. 35280 dated 3 December 2014) - Case law on the burden of proof of a hidden profit distribution (Case No. 33901C dated 2 December 2014) International news - Adoption of Council Directive 2014/107/EU amending Directive 2011/16/EU on administrative cooperation in the field of taxation - Indirect taxes - Concept of “fixed establishment” of the recipient of services (Case C 605/12) - Parent-subsidiary directive: EU Council agrees to add anti-abuse clause against corporate tax avoidance to the Parent-subsidiary directive - OECD releases discussion draft on interest deductions and other financial payments – BEPS Action 4 Useful information - Circular Letter on the taxation of SCS and SCSp qualifying as AIFs - Draft Circular Letter on FATCA - Double Tax treaty network
The Luxembourg tax authorities today issued Circular Letter L.I.R. n° 14/4 (the “Circular”) with respect to the taxation of income realised by a Luxembourg common limited partnership (société en commandite simple - “SCS”) or a special limited partnership (société en commandite spéciale - “SCSp”). An SCS/SCSp is a tax transparent entity for Luxembourg tax purposes and is thus not subject to Luxembourg corporate income tax or net worth tax. However, the profits of an SCS/SCSp may be subject to municipal business tax (impôt commercial communal) (i) if the SCS/SCSp carries out a business activity or (ii) if, by virtue of the business-taint theory (Geprägetheorie), the SCS/SCSp’s general partner owns 5% or more of the interests in the SCS/SCSp. The main purpose of the Circular is to confirm the position that an SCS/SCSp which qualifies as an alternative investment fund (“AIF”) within the meaning of the Luxembourg law on alternative investment fund managers dated 12 July 2013 (the “AIFM Law”) is deemed not to be conducting a business activity. This is justified by the fact that an SCS/SCSp which qualifies as an AIF has an investment rather than a commercial purpose and follows an investment policy compliant with the AIFM Law and with the guidelines issued by the European Securities and Markets Authority (ESMA). Accordingly, the Circular Letter confirms that an SCS/SCSp which qualifies as an AIF will never be subject to municipal business tax, unless its general partner holds 5% or more of the interests in the SCS/SCSp.
2014 was a busy year, not least in respect of legal and regulatory changes that may impact your business. We are pleased to provide you with an overview of the major legal and regulatory developments under Luxembourg and EU law. This short flashback will enable you to keep track of the main legal trends which marked 2014 and those which we reasonably anticipate will arise in the near future. To read the full document, please click below.
The Luxembourg budget law for 2015 and the law introducing measures for the future (“paquet d’avenir”) have been adopted on 19 December 2014. Relevant tax provisions are summarised in the following document:
On 18 December 2014, Parliament voted the Luxembourg 2015 Budget which contains various VAT measures that will apply as from 1 January 2015. The two main measures discussed in this newsflash are about: - Increase in VAT rates - New reimbursement procedure for VAT receivables Read more about these two subjects in the document attached
Our quarterly tax update is dedicated to the main changes which have occurred over the last 3 months with regard to Luxembourg and international tax law. The topics of this update are: Luxembourg news - Luxembourg budget 2015 - Luxembourg-France Double Tax Treaty amended: capital gains on the disposal of shares in companies ultimately invested in French real estate assets by Luxembourg resident companies will become taxable in France - Introduction of a Bill of Law on VAT regime applicable to the Luxembourg free zone - Introduction of a Bill of Law for the annual establishment of Net Worth Tax - Circular Letter on non-EUR functional currency - Circular Letter on exchange of land International news - The new EU Parent-Subsidiary Directive 2014/86/EU of 8 July 2014 - Derogation rule for determining the input VAT deduction right as regards the turnover-based method in the context of leasing transactions (Case C 183/13) - Internal invoicing by a company in a third country to its branch belonging to a VAT group within a Member State (Case C 7/13) Useful information - Entry into force of the Convention on Mutual Administrative Assistance in Tax Matters - Publication by the OECD of the full version of global standard for automatic exchange of financial account information in tax matters - OECD BEPS updates published on 16 September 2014 and G20 held on 20-21 September 2014 in Cairns, Australia - Double Tax Treaty Network - 5th edition of the Arendt Financial Law Forum
With an area of almost 22.000 m², the Luxembourg Freeport is ready to play host to highly valuable goods such as works of art, fine wines, precious metals, jewels and diamonds, etc.
In the article below, find a recap of the founding principles which make the Luxembourg Freeport so attractive and the main legal aspects that one envisaging to take up business in the Freeport should know.
On Friday 5 September 2014, the Luxembourg and French Finance Ministers signed a 4th amendment to the Luxembourg-France Double Tax Treaty (“Treaty”) dated 1 April 1958. According to the amendment, capital gains derived from the alienation of shares, units or other rights in a company, fiduciary or any other institution or entity whose assets consist for more than 50% of their value – directly or indirectly through one or more companies, fiduciaries, institutions or other entities - of real estate situated in the other contracting State are taxable only in that other State. The same treatment applies to rights on said real estate. The current version of the Treaty does not cover capital gains derived by a resident on an indirect alienation of real estate held through one or more interposed entities. Accordingly, capital gains derived by a resident through the alienation of shares in a company owning real estate in the other Contracting State do not currently qualify as real estate income and are hence not taxable in the source State (location of the real estate) but in the residence State (residence of the alienator). The amendment is in line with the current OECD Model Tax Convention on Income and Capital and puts an end to a potential double non-taxation in cases where the capital gain realised on the disposal of the interposed entity was exclusively taxable in Luxembourg and benefited from an exemption. The amendment of the Treaty had been expected for some time since a first protocol dated 24 November 2006 clarified the taxation rights on real estate between source and residence State but omitted to cover indirect transfers of real estate through interposed entities. The amendment enters into force on the first day of the month following the reciprocal notifications of its ratification in both States. The new provisions will apply (a) as regards income taxes levied as a withholding tax, to capital gains taxable in the year following the civil year in the course of which the amendment entered into force, (b) as regards income taxes not levied as a withholding tax, to income realised during the entire civil year or any financial year that had commenced after the civil year in the course of which the amendment entered into force and (c) as regards any other taxes, to taxation triggered after the civil year in the course of which the amendment entered into force. Accordingly, the new provisions may possibly be applied as from 1 January 2015 at the earliest. Our tax team remains at your disposal to assist you with any queries related to these changes.
Founded in 1928, the Luxembourg Stock Exchange is the global leader in international bond listings and largest in Europe. The Luxembourg Stock Exchange was the first European stock exchange to issue a Eurobond in 1963, a sukuk in 2002 and a "Dim Sum Bond" in May 2011, due to its recognition as the listing place of choice in Europe. It is the largest global Eurobond listing platform and has the highest number of RMB bond listings.
To watch the video, please follow this link: http://www.luxembourgforfinance.com/ringing-bell-luxembourg-stock-exchange-0
Our quarterly tax update is dedicated to the main changes which have occurred over the last 3 months with regard to Luxembourg and international tax law. The topics of this update are: Luxembourg news - New rules for exit tax on capital gains upon migration - Ratification of the Convention on Mutual Administrative Assistance in Tax Matters - Introduction of the new procedure for the exchange of information upon request - Introduction of the new Mini-One Stop Shop regime International news - Direct taxes – Transfer of losses within groups and consortium – Case C-80/12 - Indirect taxes – Reduced VAT rate only applicable to printed books – Case C-219/13 - Indirect taxes – Does the use of a customer’s infrastructure create a fixed establishment for VAT purposes? – Case C-605/12 Useful information - Tax treaty network - The European Union Commission adopts communication on transfer pricing - Law of 2 April 2014 transposing directives 2009/133/EC, 2011/96/EU and 2013/13/EU - OECD Declaration on Automatic Exchange of Information in Tax Matters - OECD / BEPS - Comments on discussion draft on “Neutralise the effects of hybrid mismatch arrangements”
The partners of Arendt & Medernach are pleased to announce their seminar entitled "International real estate investments through Luxembourg: Facing changes!".>
The Tax Partners of Arendt & Medernach were pleased to hold to a tax seminar dedicated to examining the practical impacts of the recent Luxembourg and international tax developments in Luxembourg on 19 June 2014.>
Arendt & Medernach is a sponsor of the ABA Tax conference 2014.
Our partners, Eric Fort and Thierry Lesage will be speakers. You can meet them during the conference which will be held from 9-11 April 2014 in Geneva, Switzerland.>
Further to our Tax Seminar in Luxembourg on 21 October 2013, please find attached the conference slides.>>
Further to our AIFMD Seminar in London on 10 October 2013, please find attached the conference slides.>
Further to our conference "Get up to speed with recent international tax and VAT developments affecting Luxembourg" held in Luxembourg on 20 September 2012, please find attached the conference slides.>
Jan Neugebauer was a speaker at the 5th Annual Worldwide Tax Update on "Luxembourg Tax Law Developments " on 15 May 2012 in Boston and on 16 May 2012 in New-York.>
Jan Neugebauer was a speaker at the European Direct Taxation seminar on "Cross border payments of interest and royalty" on 8 May 2012 in Treves.>