News on Luxembourg Funds: Residence Certificates and Circular LG - A. No. 61 of 24.11.2024
Luxembourg has recently introduced significant updates regarding residence certificates for investment funds.
These changes, outlined in Circular LG - A. No. 61 of November 24, 2024, aim to make the country even more competitive internationally and ensure greater tax transparency.
News on Luxembourg Funds: What Are Tax Residence Certificates for Investment Funds?
Tax residence certificates are documents issued by the Luxembourg tax authorities that certify the tax residency of an investment fund. This certificate allows funds to benefit from the double taxation treaties (DTA) signed by Luxembourg with other countries, thereby reducing taxation on income generated from international investments.
News on Luxembourg Funds: Differences from Previous Regulations
In the past, not all investment funds could easily obtain a tax residence certificate. The regulations were less clear, and access to these certificates largely depended on the fund's legal structure and specific regulatory framework.
With the new Circular, significant modifications have been introduced, including:
- Expanded eligibility: Alternative Investment Funds (AIFs) and SICAVs can now more easily apply for the certificate.
- Greater clarity in issuance criteria: More precise parameters have been defined to determine tax residency.
- Updated list of Countries recognizing the certificates: The new regulation has extended the validity of tax treaties to additional states, including Botswana, Cyprus, Ethiopia, France, Kosovo, the United Kingdom, Rwanda, and Hungary.
News on Luxembourg Funds: Impact of the New Regulation on Luxembourg Funds
The introduction of clearer criteria and a streamlined process for obtaining residence certificates represents a strategic advantage for Luxembourg funds. Thanks to these updates:
- Institutional investors can operate with greater tax security.
- Luxembourg strengthens its appeal as a European financial center.
- The tax management of international investment funds is simplified.
News on Luxembourg Funds: How can help you?
Circular LG - A. No. 61 of 24.11.2024 marks an important step forward for Luxembourg's investment fund sector. The expanded access to tax residence certificates and enhanced clarity in tax regulations create new opportunities for foreign investors and fund managers.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
