close
Share with your friends

Luxembourg: Legislation passed, repeals advance tax agreements and enacts ATAD 2

Luxembourg: Legislation passed, ATAD 2

The Luxembourg Parliament on 19 December 2019 passed the 2020 budget bill.

1000

Related content

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:

  • A new advance tax agreement may be requested if it has not yet produced all its effects as of the date of expiration of the prior agreement,
  • Taxpayers with a diverging year-end must file the advance tax agreement request prior to the end of their 2020 tax year (e.g., 31 March 2020 if the year-end is 31 March) for the new agreement to apply as from 2020 tax year. 

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

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal