Luxembourg: Guidance on interest limitation rules

Luxembourg: Guidance on interest limitation rules

Luxembourg’s tax authorities issued guidance—Circular L.I.R. n° 168bis/1 (8 January 2021)—that addresses the interest limitation rules.


The circular (French) clarifies the rules and certain definitions and concepts, and provides examples.

The circular also addresses:

  • The concept of symmetry as regards the interpretation of borrowing costs and interest revenues (and economically equivalent)
  • Guidance on the exceptions in relation to loans concluded before 17 June 2016 (grandfathering clause) and public infrastructure projects

KPMG observation

The interest limitation rules are complex, and tax professionals have noted that the circular does not address all practical situations or issues.

Read a January 2021 report prepared by the KPMG member firm in Luxembourg

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