On 1 December 2020, the Luxembourg tax authorities issued Circular L.I.R. n°147/2, 166/2 and Eval. N°63 (“Circular”) related to the application of the EU Parent Subsidiary Directive (“PSD”) to companies incorporated in Gibraltar. The Circular is a response to the decision rendered on 2 April 2020 by the Court of Justice of the European Union (“CJEU”) in the case of GVC Services (“Decision”), according to which the PSD does not apply to Gibraltar companies. The Circular confirms the conclusions we reached in our ATOZ Reports of 30 November 2020 on the implications of the Decision for Luxembourg corporate taxpayers. In addition, it clarifies that the CJEU Decision will not have any retroactive effect and will only apply as from 1 January 2021, which is good news