Tax News

Latest News from our EU Direct Tax Group

EU Tax News: Issue 2008 - nr. 005 October 2008 EU Case Law: ECJ decision in the Burda case (C-284/06) July 2008 EU Tax News: Issue 2008 - nr. 003 April 2008 EU Case Law: Advocate General Maduro’s Opinion in the Cartesio case (C-210/06) 3 June 2008 EU Case Law: ECJ jugdment in the Lidl Belgium case (C-414/06) 16 May 2008 Read more

• Abgeltungsteuer – Ausweitung der besonderen Übergangsbestimmungen für Spezialfonds und steueroptimierte Geldmarktfonds
  Im Schreiben vom 22. Oktober 2008 hat das Bundesministerium der Finanzen (BMF) die bereits für Spezialfonds bestehenden Einschränkungen des Bestandsschutzes in Bezug auf die Abgeltungsteuer auch auf andere Investmentvermögen ausgeweitet.
  English Version: German Flat Rate Tax – Extension of the specific transition rules for specialised investment funds and tax-optimised money market funds
  November 2008
  
  
• Qualified Intermediaries: US reporting and compliance alert: Proposed changes to QI agreement and QI audit guidelines
  On October 14, 2008, the US tax authorities (IRS) announced changes to the QI agreement as well as to the QI audit guidelines. At a conference organized by the British Bankers’ Association on October 16, 2008, Senior Executives of the IRS explained the proposed rules and provided further information on current discussions. In addition, the IRS announced the release of new draft rules on reporting and withholding before the year end.
  October 2008
  
  
• Luxemburg - Haushaltsentwurf 2009 und neue steuerliche Maßnahmen
  Am 1. Oktober legte die luxemburgische Regierung dem Parlament einen Gesetzesentwurf zu verschiedenen steuerlichen Maßnahmen vor (realisiert durch den Haushaltsentwurf und durch ein gesondertes Gesetz). Der Gesetzesentwurf bestätigt einerseits die bisherigen Ankündigungen des luxemburgischen Ministerpräsidenten, die dieser im Mai diesen Jahres in der traditionellen „Rede zur Lage der Nation“ gemacht hatte. Darüber hinaus enthält der Entwurf weitere steuerliche Maßnahmen, die für die Wirtschaft von wesentlicher Bedeutung sind.
  October 2008
  
  
• New Tax Measures for Individuals in the Pipeline
  In the state of the nation address given on 22 May 2008, Luxembourg Prime Minister Jean-Claude Juncker had announced that taxes would be lowered. This bill confirms the announcement and provides for a number of individual tax measures. There is more good news (for now?): taxes on company cars made available to employees will not be increased under the bill.
  Version française: Nouvelles mesures fiscales envisagées
  October 2008
  
  
• Luxembourg – Draft 2009 budget and new tax measures
  On 1st October, the Luxembourg government put forward to
  Parliament a proposal for new tax measures (provided for in the
  draft budget and in a separate bill). This proposal confirms
  some of the previous announcements made by the Luxembourg
  Prime Minister in the traditional "state of the nation" address
  given in May 2008.
  October 2008
  
  
• Abschaffung der Luxemburger Gesellschaftsteuer
  Das Luxemburger Finanzministerium hat dem Parlament einen Gesetzesentwurf zur Umsetzung der EU Richtlinie vom 12. Februar 2008 (Richtlinie 2008/7) bezüglich der indirekten Steuern auf die Ansammlung von Kapital (“droit d’apport”) vorgelegt. Nach dem Entwurf soll die Gesellschaftsteuer in Luxemburg ab dem 1. Januar 2009 abgeschafft werden.
  September 2008
  
  
• Abolition of capital duty in Luxembourg: another step forward!
  The Luxembourg authorities are currently preparing a bill in order to transpose the EU capital duty Directive of 12 February 2008 (Directive 2008/7/EC) into Luxembourg domestic legislation. According to the draft bill (in its current version as of to date which has not yet been presented to Parliament), capital duty would be repealed in Luxembourg as from 1 January 2009.
  September 2008
  
  
• Regulation suggestions of the Federal Ministry of Finance on the taxation of "Insurance mantles"
  We have been aware that some suggestions were made by the Federal Ministry of Finance (BMF) for amending the taxation of life insurance contracts. The BMF has targeted contracts that are commonly referred to as "Life insurance wrappers".
  September 2008
  
  
• Qualified Intermediaries: US reporting and compliance alert
  The QI program has recently been the focus of several discussions involving the IRS, ths US legislator and some international accounting firms.
  August 2008
  
  
• Changes to the tax regime governing directors' fees
  Version française: Tantièmes : modification du régime fiscal
  In a recently-issued circular (Circular LIR 94/4, hereafter "The Circular"), the Luxembourg tax authorities have introduced a scheme under which operational expenses connected with directors' fees may be deducted on a lump-sum basis.
  July 2008
  
  
• 10% Taxation for interest income: from private investments (amendments to the so called Relibi law).
  The Luxembourg parliament passed a bill in a first reading to amend the so-called "Relibi law" of the 23 December 2005 on the taxation of interest income recieved by individuals resident in Luxembourg.
  June 2008
  
  

• Luxembourg – Losses of EU Permanent Establishments - Update
  On 15 May 2008, the European Court of Justice (ECJ) ruled in the Lidl Belgium case (C-414/06) that it is not contrary to EC law for a company located in one Member State (MS) not to be able to deduct the losses incurred by its Permanent Establishments (PE) situated in another MS, where, by virtue of a double tax treaty (DTT), that PE’s income is taxed in the latter MS and the losses can be carried forward against that PE’s income in future accounting periods.
  June 2008
  
  
• Luxembourg 2009 budget announcement
  Luxembourg Prime Minister Jean-Claude Juncker gave his traditional state of the nation address.
  May 2008
  
  
• Chamber of commerce contributions
  In a decision dated 17 April 2008 (n°23755C), the administrative court confirmed the first instance judgment of 24 October 2007 (n°22636) that invalidated a notice of assessment from the Chamber of Commerce.
  April 2008
  
  
• Luxembourg – Losses of EU Permanent Establishments
  The Advocate General’s (AG) opinion in the recent Lidl Belgium case brought before the EU Court of Justice (“ECJ”) may provide taxpayers with new arguments to claim cross-border relief and ask for the deduction of tax losses generated by their EU permanent establishments at head office level.
  March 2008
  
  
• Flash News: New VAT rules on VAT representation: Adoption and publication of the Law and Grand- Ducal Regulation
  Further to the publication on February 28, 2008 of the law dated February 23, 2008, a new article 66bis introduces the system of tax representation for VAT purposes into Luxembourg VAT legislation.
  March 2008
  
  
• Flash News: Luxembourg – A favourable tax reform for 2008
  The Luxembourg parliament has enacted the budget for 2008,
  as well as various tax measures provided for by a separate bill.
  December 2007
  
  
• Flash News: New Tax Measures for individuals: Vote of the Bill No. 5801
  The Luxembourg parliament voted the bill No. 5801 on December 19, 2007.
  Broadly speaking, all tax measures for individuals included in the draft bill have been voted with the exception of the provisions on company cars.
  Version française: Nouvelles mesures fiscales destinées aux personnes physiques: Vote de la loi N° 5801
  December 2007
  
  
• Flash News: ECOFIN agrees to adopt key elements of VAT Package
  On 4 December, the EU's Economic and Financial Affairs Council (ECOFIN) agreed to formally adopt key elements of the VAT Package, meaning sweeping reforms to the rules for determining the application of VAT for businesses that supply or purchase services. Some of the changes are due to take effect from 1 January 2010; changes to the taxation of supplies of telecommunications, broadcasting and electronically supplied services to private consumers by EU businesses will be implemented in 2015.
  December 2007
  
  
• Flash News: European Commission publishes legislative proposals on reforming VAT for the financial services sector
  The European Commission (the Commission) has published its proposals to reform the application of the VAT system to the financial services (FS) and insurance sectors. The proposals will have important implications for all businesses operating in, or otherwise dealing with, the FS sector.
  November 2007
  
  
• Flash News: Bundestag verabschiedet Jahressteuergesetz 2008
  Der Bundestag hat am Donnerstag letzter Woche das Jahressteuergesetz 2008 in abgeänderter Fassung verabschiedet. Wichtigste Neuerung für die Investmentbranche ist eine Modifikationen der Übergangsregelungen zur Einführung der Abgeltungsteuer sowie die Änderung des § 42 Abgabenordnung (AO).
• English Version: „Jahressteuergesetz 2008” voted on by the German Parliament on November 9, 2007
  November 2007
  
  
• Flash News: New VAT rules: Draft bills 5797 and 5801
  Starting 1st January 2008, it is proposed to introduce the system of tax representation for VAT purposes. This system allows a foreign entrepreneur to appoint a third party in Luxembourg to carry out the necessary VAT formalities and to pay the VAT due in Luxembourg on his behalf.
  November 2007
  
  
• Flash News: New Tax Measures in the Pipeline Bill No. 5801
  Within a context of uncertain economic development and budgetary discipline, the Luxembourg government has announced a tax reform in favor of individuals only. Nevertheless, the bill No. 5801 submitted yesterday also includes measures for the benefit of business entities, namely a partial exemption of income and gains from intellectual property rights and an increase of the investment tax credit.
  November 2007
  
  
• Flash News: Chamber of Commerce Contribution
  Any Luxembourg taxpayer who carries on trade or business activities in Luxembourg is required to pay an annual contribution fee to the Chamber of Commerce. This annual fee is calculated based on the taxpayer's profit adjusted for tax purposes but before gifts and brought forward losses. In a decision dated 24th October 2007, the Tribunal Administratif invalidated a notice of assessment from the Chamber of Commerce.
  November 2007
  
  
• Flash News: Luxembourg - Budget 2008 Capital duty reduction
  By proposing to bring down the rate of capital duty to 0.5%, the Luxembourg government takes a step in the right direction, but fails to meet all the expectations of the marketplace.
• Version française: Luxembourg - Budget 2008 Réduction du droit d’apport
  October 2007
  
  
• Flash News: Modification of the flat rate tax (“Abgeltungsteuer”)
  As announced on 12 September 2007, the financial committee of the German Federal Council has recommended in its meeting on 6 September 2007 a revision of the provisions concerning the flat rate tax (“Abgeltungsteuer”) that have been voted on only in July 2007.
• Deutsche Version: Modifikationen der Abgeltungsteuer
  September 2007
  
  
• Flash News: Flat rate tax (Abgeltungsteuer) voted by the German Federal Council
  The German Federal Council has accepted today the introduction of a flat rate tax ("Abgeltungsteuer“) on income and gains from capital investments as part of the German “Corporate Tax Reform 2008” ("Unternehmensteuerreform 2008“).
  
• Deutsche Version: Einführung der Abgeltungsteuer vom Bundesrat beschlossen
  July 2007



• Flash News: An opportunity for Luxembourg funds: Improvement of the tax treatment for individual investors of foreign funds marketed in France
  Over the past two years, French law has developed and adapted to the EU environment, resulting in new opportunities for foreign funds. Basically, UCITS funds located in another Member State of the European Union, regardless of whether these funds are contractual or corporate structures, can now distribute their income to French individual investors, affording them the same tax benefits as a French UCITS.
  May 2007



• Flash News: Asset Management
  Commission begins formal enquiries on discriminatory taxation of dividends and interest paid to foreign pension
  May 2007
  
  
• VAT Refunds - Deadline: 30 June 2007
  International companies incur significant VAT costs, arising for instance out of the expenses borne by their sales representatives (i.e. accommodation, etc.). These companies might also be liable to foreign VAT on trade fair costs or conferencerelated expenses.
• Version française: Remboursement de TVA - Date limite : le 30 juin 2007
• Deutsche Version: Vorsteuer-Vergütung - Fristende: 30. Juni 2007
  April 2007



• New VAT rate - Law of 22 December 2006
  The Luxembourg government decided that some supplies of services could no longer benefit from the intermediary rate of 12% and would now be subject to the standard 15% rate instead.
• Version française: Nouveau taux de TVA - Loi du 22 décembre 2006
• Deutsche Version: Neuer Mehrwertsteuersatz - Gesetz vom 22. Dezember 2006
  March 2007
  
  
• Flash News: Verwaltungsanweisung Nr. 723 vom 29. Dezember 2006 Auswirkung der Entscheidungen BBL und ABBEY NATIONAL des Gerichtshofes der Europäischen Gemeinschaften
  In seiner Entscheidung vom 21. Oktober 2004 in der Sache BBL (C-8/03), musste der Gerichtshof der Europäischen Gemeinschaften (im folgenden EuGH) die Frage entscheiden ob eine Investmentgesellschaft mit variablem Grundkapital (SICAV) als mehrwertsteuerpflichtig anzusehen ist.
  February 2007
  
  
• Flash News: New VAT Circular: impact for undertakings for collective investments
  In a circular issued on 29 December 2006 , the Luxembourg VAT Authorities clarified their interpretation of two major decisions rendered by the European Court of Justice (ECJ) concerning investment funds.
  January 2007
  
  
• Flash News: Luxembourg 1929 Holding Companies
  Bill for repeal – SPF/Soparfi a solution?
  December 2006
  
  
• Flash News: Introduction of the European company into Luxembourg legislation
  A Luxembourg Act dated 25 August 2006 has introduced the European company (“societas europaea”) into our legal system. The Act covers company law aspects, as well as provisions for the involvement of employees.
  Version française: La société européenne intègre le droit luxembourgeois
  September 2006
  
  
• Extension of the reverse-charge mechanism to B2B transactions with non residents – summary of main provisions
  In order to reduce the levels of perceived VAT fraud involving non-resident companies, the rectifying Finance Law of 2005 introduced major changes, affecting non-established businesses and their French VAT registered clients.
  August 2006
  
  
• Details of EC Commission decision on state aid in case of Luxembourg 1929 Holding companies
  On 19 July 2006 the Commission of the European Communities notified the Luxembourg government of its decision that the Luxembourg tax regime applicable to “Holding 1929” companies constitutes a state aid in breech with Art. 87 EC Treaty. We reported on the decision in our news flash of July 21, 2006. Meanwhile, details of the decision have been published in the Luxembourg official gazette, the Memorial, on July 31, 2006.
  August 2006
  
  
• France-Luxembourg double tax treaty amendment: The end of the “La Coasta route”
  The Treaty for the avoidance of double taxation signed between France and Luxembourg on 1st April 1958, and amended by a protocol signed on 8th September 1970, is currently interpreted by both Luxembourg and French courts in such a way that it allows taxpayers to hold real estate in France through a Luxembourg corporate entity in total exemption of all real estate income (known as the “La Coasta route”).
  August 2006
  
  
• International Tax Services Newsalert: End of the Holding 1929 Tax Regime : December 2010
  On July 19, 2006 the European Commission decided that the Luxembourg tax regime applicable to “Holding 1929” companies violates EC Treaty state aid rules.
  July 2006
  
  
• Decision of the Court in the Abbey National case: administrative services could be VAT exempt but not custody services
  On May 4, 2006, the European Court of Justice ruled in the Abbey National case (n° C- 169/04), which concerns the scope of the exemption for management services of special investment funds.
  May 2006