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Tax measures to be introduced in 2015

Luxembourg

The measures follow the global trend for more transparency and more requirements for transfer pricing and anticipate some of the changes that will have to be made in order to adapt accordingly to the OECD requirements on Base Erosion and Profit Shifting (BEPS). Taxand Luxembourg discusses the changes for businesses.

Minimum Corporate Income Tax rules to be amended
In future the minimum corporate income tax (CIT) of EUR 3.210 will only apply if 2 cumulative conditions are met, which are a minimum of 90% of financial assets and a total balance sheet higher than EUR 350,000

If these 2 cumulative conditions are not met, companies will pay a minimum tax which will vary depending on the level of their balance sheet.

Transfer pricing rules to be amended
The new provisions will allow tax authorities to make adjustments to the taxable base if it appears that the price charged by the taxpayer differs from the prices that would have been applied between independent enterprises for comparable transactions.

The following situations are targeted:

  • An enterprise that takes part, directly or indirectly in the management, control or capital of another enterprise, or
  • The same persons take part directly or indirectly in the management, control or capital of two enterprises

Transfer Pricing documentation requirements
A new provision is to be introduced in the General Tax Law which explicitly extends the general obligation of information and documentation to transactions involving associated enterprises. However, the draft law does not expand on the exact contents of the required documentation.

VAT
All VAT rates will be increased by 2%, except the super-reduced 3% VAT rate which will remain unchanged. The 2% increase will take place as of January 1st, 2015 to give a 17% rate on most goods and services.

Discover more: Tax measures to be introduced as of 1 January 2015 >


Your Taxand contact for further queries is:
Samantha Schmitz-Merle
T. +352 26 940 235
E. samantha.merle@atoz.lu

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Multinationals operating within Luxembourg should be aware of potential changes to tax legislation and remain vigilant in the coming months towards the new year.

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