Greetings,
The last couple of months have been atypical and unprecedented, evolving in ways none of us could have imagined. Public health and economic development concerns have become the most important priority across the world. Luxembourg is no exception, recently recognising that now is not the right time to increase taxes and/or perform big tax reforms.
A number of recent news items are summarised below and described in more detail in this newsletter.
On 14 October 2020, the 2021 budget draft law was presented to Parliament. The draft budget introduces a number of important tax measures, some of which were already announced in the 2018 coalition agreement: changes in the taxation of Luxembourg real estate investments held by investment funds, repeal of the “warrant” regime, reform of the impatriate regime and introduction of a reduced rate of subscription tax for sustainable funds.
A draft law introducing a new rule denying the corporate income tax deduction of interest and royalty paid to entities in noncooperative tax jurisdictions, should soon be passed.
On 6 October 2020, the Court of Justice of the European Union ruled on questions raised by the Administrative Court of Luxembourg in relation to the 2014 Luxembourg law on exchange of information upon request. The Court decided that law partly infringed the right to an effective remedy and provided a definition of the concept of “foreseeable relevance” required for a request for exchange of information to be valid.
The cost of the health crisis makes it urgent for most countries to find new sources of income. The pressure on international organisations to find a global solution to tax the digital economy is increasing. From a corporate legal perspective, the Covid-19 pandemic continues to impact the governance of legal entities.
The Luxembourg Government decided to extend the possibility for companies and other legal entities to hold statutory meetings remotely until 30 June 2021. The Luxembourg Government recently presented a draft law to modernise the law of 6 April 2013 on dematerialised securities. This is part of a continued modernisation of the legal framework of financial transactions in the context of the digitalisation and new technologies.
From a regulatory point of view, the European Securities and Markets Authority have made some recommendations to the European Commission on amendments of the Alternative Investment Fund Managers Directive that are needed in order to remove some important issues identified since the implementation of the AIFMD.
Finally, given the significant impact it had on the regulatory environment and on investment managers, we review Luxembourg CSSF circular n°18/698 (23 August 2018) relating to the authorisation and organisation of investment fund managers.
We hope you enjoy reading our insights.
Stay safe.
The ATOZ Editorial Team