10 October 2014. New tax treaty with Isle of Man is in force as of 05 August 2014 and will be applicable as of 01 January 2015 (Mémorial A 190, 10 October 2014)
A bill of law (reference number 6722) (the "Bill") was lodged with the Luxembourg Parliament on 16 October 2014, referred as the "package for the future", which includes two significant tax changes, relating to:
- Clarification of the legal frame for the granting of tax rulings in Luxembourg, and
- Amendment of Luxembourg transfer pricing regulations.
On 19 May 2014, the Luxembourg Government issued a press release stating that Luxembourg and France have agreed to continue talks to negotiate and sign an amending protocol to the France-Luxembourg double tax treaty of 1 April 1958, as amended.
In 2013, automatic exchange of information was endorsed as the new global standard for exchange of information. Earlier this year, the OECD released the Standard for Automatic Exchange of Financial Account Information (also called GATCA (Global Account Tax Compliance Act), in reference to a globalisation of FATCA). The standard has two components: (i) the Common Reporting Standard ("CRS") detailing the reporting and due diligence rules to be imposed on financial institutions; and (ii) the Model Competent Authority Agreement (Model CAA) that will link the CRS and the legal instrument that will serve as a legal basis for the automatic exchange of information.
On June 16, the Luxembourg tax authorities issued long-awaited published regulations (Circulaire du directeur des contributions L.G.-A nr 60 du 16 juin 2014) for the use of functional currency other than Euro for Luxembourg tax purposes by Luxembourg tax payers (the Regulations). The Regulations set forth the conditions to be met by a Luxembourg tax payer to be able to use functional currency as well as the exchange rates to be applied. In addition, the Regulations contain detailed examples explaining the practicalities of the use of a functional currency.
