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In brief On 8 January 2021, the Luxembourg tax authorities released Circular L.I.R. No. 168bis/1 (“Circular”) providing guidance on the application of the interest deduction limitation rule introduced by the Law of 21 December 2018 (“Law”) implementing the Anti-Tax Avoidance Directive (EU) 2016/1164 of 12 July 2016 (ATAD). According to…

On 28 January 2021, the Luxembourg Parliament (Chambre des Députés) adopted1 bill of law 7547 on the non-deductibility of interest and royalty payments made to related parties in non-cooperative jurisdictions (“Law”).

As explained in our tax alert dated 20 April 2020, the new provision amends Article 168 of the Luxembourg Income Tax Law (LITL), which lists non-deductible expenses for taxpayers subject to corporate income tax. The Law therefore completes the scope of non-deductible expenses by adding a rule of non-deductibility of interest or royalty expenses paid by a Luxembourg taxpayer to a related company established in a country or territory appearing on the list of the EU as a non-cooperative tax jurisdiction.

On 14 October 2020, Luxembourg announced new provisions with respect to incentive for highly skilled and qualified workers (“Impatriate Regime”) as part of the 2021 budget bill (“Law”).1

The Impatriate Regime was introduced back in 20112 and was further amended by several circulars, including the most recent Circular LIR No. 95/2 dated 27 January 2014 (“Circular”) which have been repealed in the meantime. The government has now decided to codify the Impatriate Regime under Article 115(13) b. of the Luxembourg income tax law (LITL) and to introduce some limited changes.

The aim of Article 115(13) b. of the LITL remains close to the original objective of the Circular, which was to further enhance the competitiveness of Luxembourg by enabling Luxembourg employers to hire new talent from abroad. The changes introduced by the Law should further simplify the procedure, strengthening the clear intention of Luxembourg to remain attractive from an economic perspective.

Below we describe the regime that will be applicable as from 1 January 2021 while highlighting the main changes compared to the former rules.

The fund industry has absorbed many regulatory reforms in a decade, most notably with the AIFMD first and the increased level of risk management, monitoring and reporting required from both legislators and professional investors. From a very liberal world of real estate private equity investment in the 2000s to the…

On May 25 2018, the Council of the European Union adopted a directive concerning the mandatory automatic exchange of information in the field of taxation, in relation to reportable cross-border arrangements (Council Directive (EU) 2018/822).  This EU mandatory disclosure regime, known as the DAC6 Directive, aims to increase transparency by requiring intermediaries and, in certain circumstances, taxpayers, to report cross-border transactions that are deemed to represent aggressive tax planning.

In brief Luxembourg Prime Minister, Mr. Bettel, announced on 13 October 2020 some new tax measures during the state of the nation speech. You may recall that a structural tax reform to take place in 2021 was announced by the Minister of Finance, Mr. Gramegna, in July 2019. The Covid-19 outbreak has…