Please find below a summary of the latest tax, corporate and regulatory measures approved by the Luxembourg Government. We remain at your disposal to analyze them more in detail and to assess the specific implications for your business.
- Extension of tax compliance deadlines
- The Luxembourg Tax Administration has extended the statutory deadline to submit the 2019 corporate tax return (i.e. tax return regarding the 2019 corporate income tax and municipal business tax as well as the 2020 net wealth tax) and the 2019 personal income tax return until 30 June 2020.
- The Luxembourg Tax Administration has announced that, until further notice, no sanctions should be imposed if VAT returns and subscription tax returns are submitted after the relevant statutory deadline. Nevertheless, taxpayers are requested to comply with the regular deadlines to the extent possible.
- Deferral of tax payments
- The Luxembourg Tax Administration has announced that corporate taxpayers (as well as individual taxpayers engaged in a business, professional or agricultural activity) with liquidity issues will be entitled to a cancellation of the quarterly advances of corporate income tax and municipal business tax regarding the 2nd and 3rd quarter of 2020.
- Furthermore, they will be entitled to a 4 month payment extension for any corporate income tax, municipal business tax and net wealth tax liability becoming due and payable as from 1st March 2020.
- The request for cancellation and/or extension should be (briefly) justified. However, the cancellation/extension will be accepted automatically by the Luxembourg Tax Administration. The relevant forms can be found in the link below:
- DAC6 transposition
- On 21 March 2020 the Luxembourg Parliament passed the law implementing Council Directive (EU) 2018/822 of 25 May 2018 (“DAC6”) regarding the mandatory exchange of information in the field of taxation in relation to reportable cross-border arrangements.
- Under DAC6, EU tax intermediaries (such as lawyers and tax advisors) who design, promote and/or implement tax planning schemes shall report potentially aggressive tax planning cross-border arrangements to the tax authorities. In particular, a cross-border arrangements may be reportable if its satisfies at least one of the hallmarks listed in an annex to the DAC6 law.
- Under professional secrecy rules, law firms and some other intermediaries (such as Van Campen Liem) are entitled to a waiver from filing information on a reportable cross-border agreement. Such waiver must be duly notified to other intermediaries (or the taxpayer itself if there is no reporting intermediary).
- We remain at your disposal to further analyze how DAC6 may impact your business.
- Draft law amending certain expense deductions
- The Luxembourg Government has adopted a draft law amending the Luxembourg income tax law in order to deny deduction of interest and royalty expenses incurred by Luxembourg corporate taxpayers in connection with associated persons/entities located in non-cooperative jurisdictions (as defined by the EU). Because the draft law has not been published yet, the details of the measure and its date of entry into force remain to be confirmed.
- Therefore, at this stage it is not possible to assess the impact of this new measure on financing and IP structures involving entities located in non-cooperative jurisdictions (as defined by the EU).
- Following the inclusion of the Cayman Islands in the EU list of non-cooperative jurisdictions and the ongoing negotiations between the Cayman Islands and the EU, one important item to monitor is the impact for jurisdictions which are removed from the blacklist within a fiscal year.
Corporate Governance measures
- The Luxembourg Business Register has announced a 4 month extension in order to file the statutory financial statements, without incurring any fine or penalty. Hence, companies whose fiscal year ended on 31 December 2019 should be able to file the 2019 financial statements before 30 November 2019 without incurring any late filing penalty or sanction.
- The Luxembourg Government has enacted a Regulation intended to facilitate the administration and management of Luxembourg companies in the context of covid-19 outbreak whose main measures are as follows:
- The measures should apply regardless of any contrary provision included in the bylaws.
- Luxembourg companies (both private and public) are entitled to hold their shareholders meeting (including the annual shareholders meeting) without any physical presence (i.e. via videoconference, postal/electronic vote, etc.) up to 30 June 2020, subject to certain (minor) formalities.
- Luxembourg companies are further allowed to convene the annual shareholders’ meeting at the later of (i) six months after yearend and (ii) 30 June 2020. This applies as well for meetings which have already been convened, insofar as the modification is duly notified to the shareholders.
- Luxembourg companies (both private and public) are entitled to hold all meetings of internal organs (such as meetings of the board of managers and supervisory boards) without physical presence (via videoconference, written circular resolutions, proxies etc.).
- These measures should also apply to investment funds and
- The measures may impact the “place of effective management” of Luxembourg companies in case they are applied for a long period of time. In order to mitigate this risk, it is advisable to initiate the meetings from Luxembourg and, where feasible, to grant the Luxembourg managers a proxy (so that the decisions would be physically taken from Luxembourg).
Regulatory measures for investment funds
- CSSF (i.e. the Luxembourg financial markets supervisor) has announced a 4 week extension for the submission of the 2019 survey regarding fight against money laundering and terrorist financing. Hence, the new deadline for the submission of the survey should be 10 April 2020.
- CSSF has also announced that an extension should be granted to market participants which, in view of the current covid-19 outbreak, expect not to be able to submit the relevant statutory reporting in due time and form. In this context, a written request must be sent in advance to the following email address: email@example.com
- CSSF has published a set of FAQ with important measures for supervised entities. Please find below the link: http://www.cssf.lu/fileadmin/files/FAQ/FAQ_Covid_19_260320_fr.pdf
This email is sent for general information purposes only. It does not constitute any legal or tax advice. Van Campen Liem Luxembourg S.à r.l. does not accept any liability in connection with the content of this email.
With kind regards,
Christophe Balthazard (Christophe.Balthazard@vancampenliem.com)
Marcello Distaso (Marcello.Distaso@vancampenliem.com)
Raffaele Gargiulo (Raffaele.Gargiulo@vancampenliem.com)
Renaud Graas (Renaud.Graas@vancampenliem.com)
Jeremy Muszkatblit (Jeremy.Muszkatblit@vancampenliem.com)
Aldo Schuurman (Aldo.Schuurman@vancampenliem.com)
William Tanguy (William.Tanguy@vancampenliem.com)
Andrew de Vries (Andrew.deVries@vancampenliem.com)
Olivier Wuidar (Olivier.Wuidar@vancampenliem.com)
Van Campen Liem Luxembourg S.à r.l.