The international anti-abuse tax initiative (known as BEPS), initially aimed at counteracting aggressive tax strategies used by multinationals, has hit the fund industry hard. The fund industry has had to adapt to the new European rules implementing some of the BEPS measures, to avoid imposing an unjustified tax cost on investors which would be contrary to the tax neutrality principle applicable to investment funds.

Aware of these imperatives, the Luxembourg government has, as part of the 2023 budget, proposed to clarify the practical impact of reverse hybrid rules for certain types of investors. However, some upcoming tax measures may again force the fund industry to adapt. These include the new directive introducing minimum taxation rules (the “Pillar II Directive”), recently agreed by the EU Member States. The difficulty in applying these rules will come from their scope, which is intrinsically linked to accounting rules, IFRS in particular.

Our experts Jan Neugebauer, Tax Partner, Yves Philippart de Foy, Tax Counsel, and Yvan Stempnierwsky, Financial Reporting & Accounting Standards expert, will share their insights on these new measures that may impact investment funds.

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