Greetings!
The end of 2023 has been marked by the legislative elections and the formation of a new government in Luxembourg.
Time has now come to provide you with a few insights on what has happened in the Grand-Duchy and at European level in the past few months.
In addition to tax measures that have just been passed and will be applicable as from the fiscal year 2024, the new coalition agreement announced several tax measures for the coming years. These are described in our 2024 tax forecast.
On 23 November 2023, the Luxembourg Administrative Court gave its decision in a case concerning an interest-free loan which was granted by a Luxembourg company to its wholly-owned Luxembourg subsidiary. In our dedicated article, we analyse the decision of the Administrative Court according to which an interest-free loan qualifies as a debt instrument.
Also from a case law perspective, on 10 November 2023, the Constitutional Court concluded that the minimum net wealth tax regime for companies holding predominantly financial assets is unconstitutional in certain cases. In our article, we analyse the facts leading up to the reference for a preliminary ruling as well as the Court’s reasoning and the consequences of this ruling.
On 20 December, the law transposing the so-called Pillar 2 directive was passed. However, before being passed, a few amendments to the initial draft law were made in order to introduce additional clarification in line with the OECD guidance and address Luxembourg-specific points. In our article, we describe selected amendments proposed by the government.
In view of the upcoming change in the presidency of the Council of the EU, we provide an overview of the state of play of various (new) EU direct tax initiatives such as the “BEFIT”, “HOT” and “TP” directive proposals, as well as the “Unshell” proposal, the initiative aiming to tackle the role of so-called “enablers” called the “SAFE” proposal and also the “DEBRA” proposal to address Debt-Equity bias. The so-called “FASTER” proposal is moving forward quickly and the “DAC8” was formally adopted.
We also describe, in more detail, the implications and provide a critical analysis of the “BEFIT” and “TP” directive proposals adopted by the EU Commission on 12 September 2023.
Finally, a law on the use of digital tools and processes in company law and implementation of the digitalisation of the notarial profession was passed in June 2023. In our article, we present the main measures of this law and the current status of implementation by notaries.
We hope you enjoy reading our Insights.
The ATOZ Editorial team