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An analysis by ATOZ, Taxand Luxembourg
A recent Luxembourg Administrative Tribunal decision considered the tax treatment of share premium repayments made without a formal share capital reduction. The Tribunal found these repayments did not qualify for tax-neutral treatment and instead constituted income from a participation. As a result, such payments may be subject to Luxembourg withholding tax. The ruling adopts a contentious interpretation of the law that could have wider implications for future capital repayment.
Oliver R. Hoor and Marie Bentley from our Luxembourg member firm ATOZ analyse the ruling and assess its consistency with the parliamentary comments relating to the relevant legal provisions.
You can read the finding in full here.
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