Tax in Focus

formalise its ruling/advance tax agreement (“ATA”) practice, which should make the ATA system more efficient and sustainable. The Government will establish an advisory committee of tax experts which will provide for regular update on the global tax environment and help Luxembourg tax system to adapt to all the coming changes.

Luxembourg will remain against the introduction of a Financial Transaction Tax at the level of the EU but may agree to introduce one if this is done at global level.

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As far as the financial sector is concerned, the good news is that, contrary to what has been reported occasionally, the subscription tax due by Undertakings in Collective Investment, be they Alternative Investment Funds (“AIFs”), Undertakings for

Collective

Investment in Transferable Securities (“UCITS”) or Specialised Investment Funds (“SIFs”), will not be increased. Finally, the favourable carried interest regime which was introduced recently within the scope of the AIFM Directive is planned to be extended to all new investment funds set up in Luxembourg. Net Wealth Tax for individuals will not be reintroduced.

Luxembourg will remain against the introduction of a Financial Transaction Tax at the level of the EU but may agree to introduce one if this is done at global level.

Preparing for Reform While the new Luxembourg Government has released an

BEPS has clearly illustrated, the international tax context is currently evolving and it will change at many levels very rapidly over the coming months. Some recommendations will be made at OECD level before year- end and many jurisdictions will have to adapt their tax system accordingly. These recommendations, such as the ones expected in respect of hybrid

About ATOZ

ATOZ is a Luxembourg high end independent advisory service firm offering comprehensive solutions, encompassing the entire life cycle of an investment entity: from tax planning and corporate implementation, management and compliance / maintenance, to exit planning (sale, M&A or dissolution) with a strong focus on alternative investment PE / PERE funds, multinational corporations, financial institutions and high net worth families. ATOZ is a founding member of TAXAND, the first independent global organisation with tax professionals in nearly 50 countries. Taxand provides high quality, integrated tax advice worldwide. The Taxand tax professionals, nearly 400 tax partners and over 2.000 tax advisors in nearly 50 countries—grasp both the fine points of tax and the broader strategic implications, helping companies mitigate risk, manage tax burden and drive business performance.

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ambitious programme with a lot of positive tax measures, which reflect a clear aim to make sure that Luxembourg remains attractive, investors should keep in mind the current international tax context and more especially the on-going work aiming at fighting against base erosion and profit shifting (BEPS). As the latest OECD webcast on

instruments to avoid situations of double non-taxation, will bring more tax harmonisation in the world and will thus reduce the possibilities for jurisdictions to compete.

It means that Luxembourg will on one hand try as much as possible to implement measures, as the ones announced, aiming at attracting investments, but on the other hand Luxembourg will probably also have to revisit some of its existing tax measures or practices so that it can makes sure that these still comply with the EU or international standards in future.

Even in a more harmonized tax environment, Luxembourg will still offer attractive solutions for investors and investments through the large and efficient panel of fund vehicles and its comprehensive but highly secured corporate law regime.

In this very rapidly evolving tax environment, investors should remain very prudent and seek the advice of their tax adviser for any new investment or change in their existing investment structures.

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