On July 21st 2015, the Luxembourg tax administration issued Circular L.-G. – Conv. D.I. n° 52 (the “Circular”) on the application of the Luxembourg - Spain Income and Capital Tax Treaty (1986) (the “Treaty”) and its final protocol (the “1986 Protocol”). With the Circular, which applies immediately as from its date of issuance (i.e. July 21st 2015), the Luxembourg tax administration determines treaty access of Luxembourg investment vehicles.
The Circular states that, through the exchange of letters of April 15th 2015 and May 13th2015, the tax authorities of both countries have agreed that the Treaty does not apply to:
- Certain undertakings for collective investments (“UCIs”) governed by part II of the Luxembourg law of 17th December 2010 relating to undertakings for collective investments, as amended (the “2010 Law”).
- Certain specialised investment funds (“SIFs”) governed by the Luxembourg law of 13th February 2007 relating to specialised investment funds, as amended (the “2007 Law”).
- Family wealth management companies (société de gestion de patrimoine familial, “SPF”).
Therefore, Paragraph 1 Ad articles 1, 3 and 4 of the 1986 Protocol now precise that the Treaty will not be applicable to SIFs and UCIs organised as investment companies with variable capital (“SICAVs”) and investment companies with fixed capital (“SICAFs”) as of July 21st 2015.
As regards the exclusion of the UCIs and SIFs, from treaty access, the Circular merely confirms the position that was already specified in previous circulars (e.g. circular L.-G. -A. N° 61 of 12th February 2015).