INSIGHT: Are Verbal Confirmations Binding on the Luxembourg Tax Authorities?

Do verbal confirmations have any binding effect on the Luxembourg tax authorities? A recent judgment provides the answer.

The Luxembourg Administrative Tribunal, in a decision of December 13, 2018, ruled on the potential binding effect of verbal comments of the Luxembourg tax authorities regarding the tax qualification (as equity vs. debt) of equity tainted loans (‘‘ETL’’s) granted by a Luxembourg corporate taxpayer to its Luxembourg subsidiaries.