Tax has played a significant role in helping individuals and businesses alike survive the
economic consequences of Covid-19. Various initiatives and relief programs have helped breathe life into the economy during a once-in-a-life-time challenging period.
Need a refresher on the latest Covid-19 tax measures for business? We highlight three key points to keep in mind below.
1. Corporate tax returns 2019:
There is no extension for filing deadlines in the law but there is administrative tolerance until 31 March 2021.
2. Corporate tax returns 2020:
There is an extension in place with a filing deadline of 30 June 2021.
3. Shareholder and board meetings:
Remote shareholders and board meetings (no physical presence of the members required) allowed until 30 June 2021.
Before we know it, June will be here and so will the end of the filing deadline extension for 2020 income tax. We bring clarity and act as a reminder for all the deadlines you should know as an employee in the Grand Duchy.
Extension of individual tax returns filing deadline:
Cross border situations:
While the Luxembourg tax authorities have not issued formal transfer pricing guidance regarding the impact of the Covid-19 pandemic, Luxembourg follows the recommendations of the OECD very closely. In this respect, the Luxembourg tax administration will most likely rely on the guidance for transfer pricing implications of COVID-19 released by the OECD on 18 December 2020.
The guidance focuses on four priority issues:
These topics may be interrelated and need to be considered together within the analytical framework of the OECD transfer pricing guidelines.
In the context of financing activities, 2020 has been a turbulent year and the following aspects need to be monitored in the FY2020 transfer pricing documentation and, further, in decisions to potentially revisit existing transfer pricing policies regarding liquidity management.
To be monitored:
Tax impacts of Covid-19 sanitary measures