Luxembourg: Tax News in Short
1. INTERNATIONAL TAX, LUXEMBOURG FURTHER EXPANDS ITS TREATY NETWORK
Luxembourg / Saudi Arabia: closer to the East
Luxembourg signed its first tax treaty with Saudi Arabia on 7 May 2013 and reinforces its presence in the Middle East region (which already includes Bahrain, Qatar and the United Arab Emirates). There with, Luxembourg confirms its position as an uncontested place for cross border investments.
2. EU ADMINISTRATIVE COOPERATION IN THE FIELD OF TAXATION
Luxembourg implements council directive 2011/16/EU into domestic law
The law dated 29 March 2013 relating to administrative cooperation in the field of taxation (the “Bill”) strengthens administrative cooperation between EU Member States with international standards of transparency on exchange of information. The Bill also abrogates the amended law dated 15 March 1979 relating to the international administrative assistance in the field of direct taxes.
3. AIFMD – OUTSTANDING OPPORTUNITIES ARE NOW THERE
On 12 July 2013 European Directive 2011/61/EU on Alternative Investment Fund Managers was implemented in Luxembourg. The AIFM law contains specific tax provisions of outmost interest for the Alternative Investment Fund community:
First, the creation of a Special Limited Partnership, which brings a flexible and tax neutral partnership structure for investors; and
Secondly, the creation of an incentive tax regime for carried interest paid to employees an alternative investment fund manager.
Details can be found on the following link: http://www.vdblaw.com/2013/02/february-2013-tax-news/
4. DEVELOPMENT OF WEALTH MANAGEMENT
Draft bill 6595 introducing the private estate foundations
An additional wealth management vehicle has been proposed on 22 July 2013: alongside fiduciary contracts, life insurance wrappers and usual corporate entities (SPFs, SIFs, Soparfis), the draft bill creating the Luxembourg private estate foundation shows a positive trend to keep Luxembourg on the lead as a primary jurisdiction for private banking and wealth structuring activities.
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