Faisant suite aux travaux relatifs à l’érosion de la base d’imposition et au transfert de bénéfices (« BEPS ») menés depuis plusieurs années par l’OCDE, le Conseil de l’Union européenne a adopté en juillet 2016 une directive établissant des règles pour lutter contre certaines pratiques d’évasion fiscale (la « Directive »). La transposition au Luxembourg de l’une de ses mesures phares, la règle dite de « limitation des intérêts » (la « Règle »), mérite une attention particulière.
Tribune par Jan Neugebauer et Yves Philippart de Foy dans cet article publié dans LEGIMAG.
This Q&A guide to tax on corporate lending and bond issues in Luxembourg has been first published in Thomson Reuters Practical Law guide.
On 26 July 2016, bill of law N° 7020 on the implementation of the 2017 tax reform package was filed by the Luxembourg Government with the Parliament (Chambre des Députés). The new measures affecting both business and individual taxation were originally announced on 29 February 2016 (please refer to our Newsflash dated 29 February 2016 available in our website). The bill mainly follows the announced measures with certain amendments. The key measures may be summarised as follows:Business taxationDecrease in the statutory corporate income tax rateThe maximum statutory corporate income tax (”CIT”) rate will be progressively decreased from its current rate of 21% to 19% in 2017 and then to 18% in 2018. The decrease will lead to a maximum aggregate rate for CIT, municipal business tax (Luxembourg-city) and the contribution to the employment fund of 27.08% in 2017 and 26.01% in 2018. In addition, companies whose annual net profits do not exceed €25,000 may benefit from a reduced CIT rate of 15% (currently a reduced rate of 20% applies to companies whose annual net profits do not exceed €15,000). An intermediary rate for net profits between €25,000 and €30,000 has lastly been added in the bill. Such intermediary rate is set at €3,750 plus 33% of the net profits exceeding €25,000.Limitation of the carry forward of tax lossesThe carry forward of tax losses incurred as from 2017 will be limited to 17 years. The initial proposal included a double limit of 10 years and offset against only 80% of the net taxable profit, but the final bill has been improved in this respect. The 17-year limit is motivated by the expectation that a viable business should be able to absorb losses within the 17 following years. The limitation of the carry forward will only apply to losses incurred within financial years ending after 31 December 2016 while those realised within previous exercises continue to benefit from the current rules which provide that tax losses will be carried forward indefinitely by the taxpayer who has suffered them.Increase and extension of the investment tax creditsTax credits currently creditable against CIT may be granted upon demand for (i) certain qualifying additional investments and (ii) global investments. The bill increases the rate of the tax credit from 12% to 13% for qualifying additional investments and from 7% to 8% for global investments on the first tranche of annual global investments not exceeding €150,000. While the initial proposal only aimed at increasing the rates thereof for agricultural enterprises, the final bill extends the increases in rates to all enterprises. In addition, investment tax credits will also be made available for investments in assets that are physically exploited within a Member State of the European Economic Area, which is currently not the case.Increase in the Minimum Net Wealth TaxThe minimum net wealth tax applicable to Luxembourg companies whose financial assets, receivables against related companies, transferable securities and cash deposits exceed both (i) 90% of their total balance sheet and (ii) €350,000 will be increased from the current amount of €3,210 to €4,815 (including the contribution to the employment fund).Value added taxTee bill also contains certain significant amendments in the field of VAT:
Arendt & Medernach, the leading independent business law firm in Luxembourg, is pleased to announce the arrival of Yvan Stempnierwsky as Of Counsel at the firm.
On 14 July 2016, the Luxembourg Parliament adopted a bill to implement (i) Directive 2014/56/EU on statutory audits (audits of annual accounts or consolidated accounts) (the “Directive”) and (ii) certain provisions of EU Regulation 537/2014 on the specific requirements applicable to the statutory audit of public-interest entities (the “Regulation”).The law will become effective after its publication in the Luxembourg official journal.This bill will replace the Luxembourg law of 18 December 2009 on the audit profession.There will not however be any significant change in the legal and regulatory framework of the audit profession except for the redefinition of the auditor’s role and the missions of the supervisory bodies (the Commission de surveillance du secteur financier (CSSF) and the Institut des réviseurs d’entreprises (IRE)).Redefinition of the auditor’s roleThe role of the approved auditor (réviseur d’entreprises agréé) has been clarified and strict rules will be introduced in order to strengthen its independence. In Luxembourg, two codes of the Fédération internationale des experts-comptables (IFAC) and certain regulations of the CSSF have already implemented such clarification and stricter rules.Finally, the missions that have so far been restricted to approved auditors may be carried out by auditors (réviseurs d’entreprises) except for a company’s statutory audit, which may only be carried out by an approved auditor.Restriction to the audit mission periodIn order to avoid any familiarity risk which may arise during an audit mandate, an audit mission may be renewed each year but only for a maximum aggregate duration of 10 years. This audit mission may even be renewed beyond 10 years if a public tendering process is launched.Moreover, the key audit partners in charge of carrying out a statutory audit in a public-interest entity may only carry out this audit for a maximum period of 7 years.List of additional information to be provided in the audit reportIn order to improve the information value of the audit report, such report must contain certain mandatory information, such as, but not limited to:
Improvement of the supervision of auditors and of the cooperation between auditors’ supervisors within the European Union
European passport and use of international auditing standards
Luxembourg has now adopted the law implementing Directive 2014/95 amending the Accounting Directive (Directive 2013/34/EU) which requires certain large companies and groups to disclose non-financial and diversity information.
De nombreuses interrogations sont soulevées par la toute nouvelle circulaire de l'AED relative à la fiscalité des administrateurs.>
Distinguished external speakers together with representatives from our firm will discuss topics including: RAIF, Brexit, BEPS and EU investment fund landscape post UCITS V and AIFMD.>
We are delighted to announce our 7th Arendt Financial Law Forum Asia to be held in Raffles Hotel in Singapore on Wednesday, 19 October 2016. >
Arendt & Medernach is delighted to announce the second edition of the Arendt Young Leaders Days, a forum which aims to provide an insight into the current and future European and Luxembourg business environment.>
Please join us on 15 September 2016 for a breakfast seminar during which we will present and discuss the most relevant and up-to-date AIF structuring trends for the European AIF industry at large.>
Annual Seminar and Cocktail Reception took place in New York on Tuesday, 13 September 2016.
The partners of Arendt & Medernach are pleased to hold their BEPS breakfast tax seminar in the auditorium of Arendt House on Wednesday, 25 May 2016.>
The 16th Annual Tax Planning Strategies – U.S. and Europe will be held from March 16 to 18 in Milan. It will focus on all the initiatives that affect corporate taxpayers.>
Arendt & Medernach is a sponsor of the Luxembourg for Finance - Financial seminar 2016 which will be held on January 28 in Milan, Italy.>
We are pleased to invite you to our 6th Arendt Financial Law Forum Asia to be held in Hong Kong on Thursday, 5 November 2015.>
We are pleased to announce our 6th Arendt Financial Law Forum Asia to be held in Singapore on 4 November 2015.>
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.>