On 14 October 2019, the Luxembourg government presented the 2020 draft budget law (bill 7500, “the bill”).
The bill’s main tax measure relates to advance tax agreements (ATAs) that direct tax authorities issued before 1 January 2015. These agreements will no longer be valid after the 2019 tax year.
In 2015, the ATA procedure was updated and formalized in Luxembourg domestic law (the “New Procedure”), limiting the validity period to 5 years. The bill’s new measure should now complete the transition between the old ATA procedure and the new one.
While ATAs obtained before 2015 may no longer be useful to many taxpayers — for example, due to a change in the law or to transactions that have stopped being effective — the new measure could still impact some taxpayers, who may request new ATAs under the New Procedure to cover subsequent tax years — i.e. from the 2020 tax year onwards.
In a fast changing tax landscape, it’s more essential than ever that taxpayers monitor their structures, assess potential risks and identify opportunities. Our tax experts are on hand to help you with these important tasks.
The bill is still following the legislative process and may be amended before its vote in the Chamber of Deputies. Stay tuned!
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