On 5 December 2018, the new Luxembourg government was installed. Its policy program for the coming years includes, on the tax side, a further decrease of the Luxembourg corporate tax rate with one percentage point.
Further to the elections for Parliament held in October this year, the former ruling coalition between the liberal, ecological and socialist parties emerged victorious and the Prime Minister was appointed by the Grand Duke to form a new government.
Luxembourg’s well-established reputation as a leading financial centre makes it a natural candidate for financial companies weighing their Brexit relocation options.
Luxembourg and France have started the ratification process of the new double tax treaty (“DTT”)they signed on 20March 2018. For the new DTT to become applicable as from 2019, the two ratification procedures would need to be finalised and the instruments of ratification exchanged before the end of 2018.
On 1 August 2018, the German Ministry of Finance published the amended draft bill of the Annual Tax Act 2018 which will be subject to further discussions in the parliament in the coming months.
On 7 June 2017 Luxembourg and more than 70 other jurisdictions signed the multilateral instrument (“MLI”) to integrate base erosion and profit shifting (“BEPS”) measures into double tax treaties.
On June 18th 2018, the Luxembourg government published a draft law implementing the first Anti-Tax Avoidance Directive (hereafter “ATAD”) into Luxembourg law (please see our Newsletter of April 2016 on the topic of the ATAD).
On 7 May 2018, the Luxembourg tax authorities released a circular introducing for Luxembourg corporate taxpayers some new reporting requirements on transactions concluded with related parties located in so-called “non-cooperative jurisdictions”.
On 3 July 2018, the OECD launched a consultation on the transfer pricing of financial transactions by publishing the first draft of a new chapter of the OECD Transfer Pricing Guidelines for Tax Administrations and Multinational Enterprises. The consultation comments are invited until the end of the consultation period on 7 September 2018.
On 20 June 2018, the Luxembourg Government filed the bill of law n°7318 (“Draft Law”) implementing the so-called Anti-Tax Avoidance Directive (“ATAD 1”).
