Read our insights

On 28 March 2023, Luxembourg government introduced bill no. 8186 which proposes new procedures for concluding bilateral and multilateral advance pricing agreements, clarifies the conditions for contesting tax assessments, and outlines specific transfer pricing documentation requirements. The Draft Bill also introduces new bookkeeping requirements, and enhances administrative cooperation between the Luxembourg tax authority and other public authorities.

Following the monthly meeting of the Index Commission, the STATEC has confirmed the triggering of a new salary indexation as of 1 April 2023.

On 27 January 2023, the Luxembourg Administrative Tribunal (the “Tribunal”) pronounced its judgment in case n° 42432 relating to the tax treatment of redemption of a share class. In this landmark decision, the Tribunal dealt with the issue of whether the repurchase of such a class of shares, followed by their cancellation and a reduction in the share capital, triggers Luxembourg withholding tax (“WHT”). Based on the decision of the Tribunal, the redemption should qualify as a capital gain at the level of the shareholder up to the amount corresponding to the fair market value of the redeemed shares.

The 2022 tax forms are here! Discover our payroll newsflash and learn more about new rules in 2023 at a glance.

On 14 February 2023, the European Union adopted the revised list of non-cooperative jurisdictions for tax purposes, whereby British Virgin Islands, Costa Rica, Marshall Islands and Russia were added to the list. The Blacklist entered into force on 21 February 2023, upon its publication in the Official Journal of the EU. It is now composed of 16 jurisdictions, with the next revision due in October 2023.

On 17 January 2023, the Committee on Economic and Monetary Affairs of the EU Parliament adopted a number of recommendations for amendments to the draft directive relating to the prevention of the misuse of shell entities. ATAD III aims to combat misuse of shell entities by introducing minimal substance requirements and improving exchange of information between the EU tax administrations. It is scheduled to enter into force on 1 January 2024, with a look-back period starting on 1 January 2022.

Discover our payroll newsflash and learn more about increase in social minima cross-border workers, car benefit in kind, grant thornton luxembourg.

On 12 October 2022, the 2023 draft budget law no. 8080 (“Draft Law”) was introduced to the Luxembourg Parliament. As the current period is characterized by various political and economic developments, no extensive tax measures have been proposed. The Parliament approved the Draft Law on 15 December 2022, subject to confirmation by the Luxembourg State Council that the second vote is not required.

Further to our tax alert “European Union reaches an agreement on minimum corporate tax”, we would like to share information on the measure concerning Pillar 2. Learn more

Further to our tax alert “Luxembourg’s newly proposed tax measures”, we would like to share information on the measure concerning the decrease of Luxembourg VAT rates for year 2023. Learn more

Grant Thornton Luxembourg would like to point out some important guidelines and features regarding the Country-by-Country Reporting (“CbC Reporting”) laws in Luxembourg as the fiscal-year 2022 (“FY22”) is drawing to a close. This is important as the close of FY22 will bring with it the deadlines for various CbC Reporting obligations for many Luxembourg companies.

The Luxembourg Parliament adopted on 18 October 2022 the bill of law number 6539B (the Law) introducing the administrative dissolution without liquidation procedure (the Administrative Dissolution Procedure). The purpose of the Law is to implement a collaboration between the Public Prosecutor and the Luxembourg Trade and Companies Register (the RCS) in order to dissolve dormant and empty shell companies in a more time- and cost-efficient way by avoiding the formal judicial liquidation procedure.

On 12 October 2022, the 2023 draft budget law no. 8080 (‘‘Draft Budget Law‘‘) was introduced to the Luxembourg Parliament. Due to the current economic situation, no substantial tax reforms have been proposed. On the same day, a drop in VAT rates was proposed by the draft law no. 8083 (“Draft VAT Law”). Moreover, draft law no. 8082 (“Draft RE Law”), introducing changes to the taxation of real estate, was filed with the Luxembourg Parliament on 10 October 2022. Learn more

On 4 May 2022, the Luxembourg tax authorities (“LTA”) published revised guidance (the “Revised Guidance”) relating to the law dated 25 March 2020 (the “DAC 6 Law”) in the form of Frequently Asked Questions. The Revised Guidance contains clarifications relating to certain concepts present in the DAC 6 Law.

The Energy Tax Credit is a measure introduced by the Chamber of Deputies from July to compensate the postponement of the index and thus supporting households to face the soaring prices of energy.

In terms of fiscal measures, the exceptional Covid-19 measures put in place through mutual agreements with the border countries to enable homeworking have ended on 30 June 2022. From a fiscal point of view, the tolerance threshold of days worked abroad for non-resident employees is fixed from July 2022.