Now that we are in the home stretch of 2016, some last minute tax measures have been presented. At local level, following the draft law on the 2017 tax reform presented over the summer, additional tax measures have been presented as part of the 2017 budget, introducing notably a more robust framework for transfer pricing. The Luxembourg VAT authorities released the long-awaited Circular on the VAT treatment applicable to directors' fees. Luxembourg has also started implementing some of the BEPS measures recently introduced at EU level: a draft law has been presented to Parliament to introduce Country-by-Country reporting. Finally, we come back to the draft law aiming at anticipating an upcoming amendment to the US-Luxembourg double tax treaty which would end situations of double non-taxation resulting from different interpretations of the permanent establishment (PE) concept: the Luxembourg State Council has recently concluded that this draft law was unconstitutional. In this issue of ATOZ Insights, we explain the reasons behind the Luxembourg State Council's conclusion and what it means for the upcoming changes.
At European level, only 4 months after the adoption of the EU Anti-Tax Avoidance Directive (ATAD), the European Commission has presented an additional package of tax measures. The package includes, among others, a re-launch of the Common Consolidated Corporate Tax Base (CCCTB) and amendments to the ATAD (so-called "ATAD 2") in order to fully implement Action 2 of the BEPS Action plan at EU level, removing all types of hybrid mismatches, including those involving non-EU countries. CCCTB will most probably require a lot of time and will incite discussion among the EU Member States before it can become, if it ever becomes, reality. As far as ATAD 2 is concerned, the objective of the EU Presidency is to achieve an agreement before the end of this year.
Finally, in these ATOZ Insights, we end with one of the important measures introduced by the recent reform of the Luxembourg Company law: the introduction of a new Luxembourg legal form of company, the SAS.
We hope you enjoy these Insights.
Download >> ATOZ Insights - December 2016
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