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Circular CSSF 24/847 introduces a comprehensive framework for reporting ICT-related incidents in the financial sector. The aim is to gain a more detailed understanding of the nature, frequency, significance, and impact of such incidents within the context of a highly interconnected global financial system. The circular addresses the evolving ICT and security risks by expanding the incident coverage and introducing a structured reporting mechanism.

On 20 December 2023, draft law no. 8292 (“Draft Law”), transposing the EU Council Directive 2022/2523 of 14 December 2022 (“Pillar Two Directive”) into Luxembourg national law, was adopted by the Luxembourg Parliament (the “Law”). The Law aims to ensure that multinational enterprise (“MNE”) groups and significant large domestic groups pay a minimum level of tax of 15%. It incorporates amendments proposed by the Luxembourg Government in November 2023 in order to be aligned with administrative guidance issued by the OECD.

On 22 December, the Administration de l’enregistrement, des domaines et de la TVA (“AEDT”) has issued circular no 781-1 on VAT on directors’ fees.

Grant Thornton Advisory, alongside 12 fellow European Grant Thornton member firms is carrying out a survey to identify key trends about the DPO (Data Protection Officer) function in Europe.

Following the CJEU’s decision C-288/19, “QM” of January 20th, 2021, the VAT treatment of company cars granted by a company to its employees should be modified for most cases applied by Luxembourg companies. Following this “QM” case-law, in the event where a company provides company cars to its employees, and provided the below conditions are met, this supply corresponds to a VAT taxable activity on which VAT must be collected by the company and accordingly declared to the VAT Authorities

The law of August 7, 2023 on non-profit associations and foundations was published in the Official Journal on September 19, 2023 and come into force since September 23, 2023. It applies to newly created non-profit organisations and foundations from this date.

In the rapidly evolving financial landscape, regulatory compliance is more than just a checkbox; it’s a fundamental pillar ensuring the stability and integrity of financial markets. Two key regulations governing outsourcing and third-party ICT services in financial entities are CSSF CIRCULAR 22/806 and DORA (Digital Operational Resilience Act). While they share a number of similarities, the unique features of DORA offer some important benefits.

On 12 September 2023, the European Commission adopted the proposal for a directive “Business in Europe: Framework for Income Taxation. BEFIT aims to introduce a single set of rules applicable to determine the corporate income tax base of multinational enterprises in all EU Member States as well as a simplified transfer pricing approach for assessing intercompany transactions. In the words of the EC, the Proposal is motivated by reduction of tax compliance costs for large, cross-border businesses in the European Union.

STATEC has confirmed, on Wednesday 30 August, the triggering of a new salary indexation as from 1 September 2023.

On 4 August 2023, the Luxembourg Government introduced to the Luxembourg Parliament the draft law no. 8292 (the "Draft Law"), aimed at implementing the provisions of the European Union (“EU”) Council Directive 2022/2523 of 14 December 2022 (the “EU Pillar Two Directive” or the “Directive”). In line with the Directive, and in order to ensure that large multinational enterprise (“MNE”) groups and significant large domestic groups pay a minimum level of tax, the Draft Law introduces three new taxes into Luxembourg national law.

The European Central Bank ("ECB"), on July 24th, announced a public consultation on Guide on effective Risk Data Aggregation and Risk Reporting (“RDARR”). The consultation is opened until October 6th and the ECB invites comments from Banks and other stakeholders on effective Risk Data Aggregation and Risk Reporting.

As stated in the March tripartite agreement, a new tax credit, the “Crédit d'Impôt Conjoncture” (economic tax credit) will increase salaries retroactively from January 2023.

On 13 July 2023, the Luxembourg Government presented the draft law no. 8276 to the Luxembourg Parliament. The Draft Law proposes changes to the current investment tax credit regime by increasing the rates of the global ITC and introducing a new ITC for investments and expenses related to the digital transformation and the ecological and energy transition. The proposed measures are planned to apply as from tax year 2024.

On 30 June 2023, the Luxembourg tax authority issued the updated guidance in form of an FAQ (the “Guidance”) on the law implementing the EU Directive on the mandatory disclosure rules and exchange of cross-border tax arrangements (“DAC 6”). The Guidance contains welcome clarifications concerning hallmarks C1 and E3, as well as an explanation regarding the notification obligations of persons covered by the legal professional privilege.

On 30 March 2023, Luxembourg Administrative Tribunal (the “Tribunal”) rendered a decision denying the use of carried forward tax losses to a Luxembourg company (“LuxCo”) based on the abuse of law provision (the “Decision”). The case concerned tax losses dating from a period during which LuxCo was a holding company, and which it intended to use after a number of years of being a dormant company in order to offset capital gain realised from the disposal of immovable property.

On 9 June 2023, the Luxembourg tax authorities (“LTA”) issued a circular L.I.R. n°168quater/1 (the “Circular”) clarifying the application of the reverse hybrid rules, as provided for in article 168quater of the Luxembourg Income Tax Law (“LITL”). Additionally, a FAQ on the related tax form 205 was published, detailing the tax compliance obligations of reverse hybrid entities.