As spring is upon us, the time has come to present our latest edition of our Insights, highlighting recent developments from the Grand Duchy, at European level, and in the Middle East over the past few months.
In this edition, we explore a diverse range of key topics that have shaped the tax landscape.
Focusing first on Luxembourg, we provide a comprehensive overview of the newly introduced impatriate tax regime, outlining its key features, conditions of eligibility, and the potential tax benefits available to individuals relocating to the jurisdiction.
We also examine the recent decision of the Administrative Court concerning the tax reclassification of interest-free shareholder loans, with particular attention to the Court’s analysis of the 85/15 debt-to-equity ratio practice and the implications arising therefrom.
Staying in Luxembourg, we address key amendments introduced by the new circular revising the rules for determining arm’s length remuneration for upstream loans granted to both individual and corporate shareholders, as well as the updated circular concerning the issuance of residence certificates for Luxembourg undertakings for collective investment in the context of double tax treaties.
At European level, we analyse the recent decision of the Court of Justice of the European Union in the Nordcurrent case, which provides clarification on the application of the general anti-abuse rule under the Parent-Subsidiary Directive to national participation exemptions and its implications for Luxembourg companies.
Concerning VAT, we assess the practical impacts for the financial sector of the new Council Directive on VAT in the Digital Age (ViDA), which notably generalises electronic invoicing and digital reporting.
From the Middle East, we outline the newly published corporate tax guidance published by the United Arab Emirates Ministry of Finance, focusing on interest deduction limitation rules.