On 22 August 2025, the Luxembourg tax authorities published a new circular L.I.R. n°168quater/2 dated 12 August 2025. It provides clarifications on the interpretation of the carve-out from the reverse hybrid mismatch rule applicable to collective investment vehicles (CIVs) under Article 168quater, paragraph 2 of the Luxembourg Income Tax Law.
The reverse hybrid mismatch rule does not apply to a collective investment vehicle, defined as an investment fund or vehicle that is widely held, holds a diversified portfolio of securities and is subject to investor-protection regulation in the country in which it is established. The new circular aims at clarifying the criteria that define a collective investment vehicle for tax purposes.
Our Tax Partner, Andreas Medler, and our Chief Knowledge Officer, Marie Bentley, describe hereafter the clarifications brought by the Luxembourg tax authorities in this new circular.
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.
