On 22 June 2016, a draft law was submitted to the Luxembourg Parliament anticipating an upcoming amendment to the US-Luxembourg double tax treaty (DTT). Taxand Luxembourg explains the amendment.
The aim of this amendment is to stop situations of double non-taxation resulting from different interpretations of the permeant establishment (PE) concept in Luxembourg and the United States.
Example: Status quo
Taxpayers that have implemented US branches of Luxembourg companies into their structure should already be aware of the on-going discussions regarding the US-Luxembourg DTT initiated by the US Internal Revenue Service more than a year ago.