The Luxembourg Parliament on 19 December 2019 passed the 2020 budget bill.
The legislation includes expiration of pre-2015 advance tax agreements as well as measures to transpose into Luxembourg domestic tax law the EU Anti-Tax Avoidance Directive 2 (ATAD 2).
The measure relating to the expiration of advance tax agreements issued by the tax authorities before 1 January 2015 provides that these agreements will no longer be valid after 2019. However, taxpayers will be allowed to request a new advance tax ruling under the procedure applicable since 2015. In early December 2019, the tax administration issued a release clarifying the process for obtaining a new advance tax agreement:
Concerning implementation of ATAD 2, the legislation reflects a clarification on the reverse hybrid provision and extends the scope of existing anti-hybrid rules to additional categories of mismatches and to mismatches with third countries. These new measures will apply to financial years starting on or after 1 January 2020—except for reverse hybrid provisions that will apply as from tax year 2022.
Read a December 2019 report prepared by the KPMG member firm in Luxembourg
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