The amended Luxembourg tax consolidation regime: improvements still needed

The 2021 budget law dated 19 December 2020 introduced a new provision dealing with the tax consolidation regime with effect as from tax year 2020. The amendments to the regime aim at reflecting the recent decision of the Court of Justice of the European Union (“CJEU”) regarding the consequences of the change from a “vertical” to a “horizontal” tax consolidation (see “The modification of a vertical tax consolidation group into a horizontal tax consolidation group does not end the tax consolidation regime” in ATOZ Insights - July 2020). The new provision confirms that such change will not entail any negative tax consequences for the members of the tax consolidated group, provided that certain conditions are met.