Luxembourg: Real estate-related tax obligations of selected investment fund vehicles

Guidance regarding real estate-related tax obligations applicable for selected investment fund vehicles holding Luxembourg real estate

Real estate-related tax obligations of selected investment fund vehicles

The Luxembourg tax authorities in January 2022 issued guidance regarding the real estate-related tax obligations applicable for selected investment fund vehicles holding Luxembourg real estate.

While the real estate tax levy only applies to revenue derived from Luxembourg-based real estate, the guidance provides a reminder that all “non-transparent” Luxembourg investment fund vehicles having a legal personality distinct from their shareholders and that are not incorporated under the legal form of a Luxembourg limited partnership (SCS) must file a specific notification prior to 31 May 2022—even if not owning Luxembourg real estate.

By 31 May 2022, qualifying investment fund vehicles must report whether or not, during any period of time in 2020 or 2021, they owned real estate in Luxembourg or held a participation in a vehicle owning real estate located in Luxembourg.

The reporting obligation also applies in instances when a change of legal form occurred (i.e., when an “opaque” qualifying investment fund vehicle converted into a tax-transparent investment fund vehicle during calendar year 2020 or 2021) while holding Luxembourg real estate at the time of conversion.

For those holding Luxembourg real estate and subject to the real estate-related tax levy, a declaration is deemed to comply with the reporting obligation.

The guidance provides further information on the applicable penalties for default or late filling.

Read a February 2022 report prepared by the KPMG member firm in Luxembourg

 

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