Europe
Luxembourg
Europe
Luxembourg releases guidance on tax treatment of limited partnerships
The Luxembourg tax authorities released a tax circular January 9 detailing the tax treatment of income from Luxembourg limited partnerships and Luxembourg special limited partnerships, including specific guidance on entities whose activities that fall within the definition of an alternative investment fund, writes PwC in a January 14 tax alert. For details, see PwC.
Belgium
EU Commission to investigate tax ruling practices of all EU states
The European Commission has enlarged its state aid investigation into private tax ruling practices to cover all 28 European Union states. “The Commission will ask Member States to provide information about their tax ruling practice, in particular to confirm whether they provide tax rulings, and, if they do, to request a list of all companies that have received a tax ruling from 2010 to 2013,” the Commission said December 17 in a press release . . .
Europe
Amazon stops routing some European profits through low-tax Luxembourg
Amazon has confirmed that as of May 1 it began booking profits from sales in the UK, Italy, Spain, and Germany in the country where the sale actually took place rather than in low-tax Luxembourg. See, New York Times, Wall Street Journal, Financial Times, The Independent, International Business Times, The Guardian, Tim Scott – Tax is an Accrual Business, Out-Law.com
Estonia
Luxembourg and Estonia sign tax treaty, text available
The governments of Luxembourg and Estonia, on July 7, signed an agreement for the avoidance of double taxation. Text (PDF 1.05MB)
Europe
EU Commission expected to soon rule that APAs granted to Starbucks by Netherlands and to Fiat by Luxembourg were illegal state aid >>The Wall Street Journal
Decisions on the advance pricing agreements may be released as soon as next Wednesday, writes Tom Fairless of The Wall Street Journal. See: The Wall Street Journal. More: Bloomberg. Related: MNE Tax.
Europe
Another ex-PwC employee charged in Luxembourg tax leaks
A second man has been charged with crimes in Luxembourg for stealing and leaking confidential PwC client tax documents, including 548 private rulings, that revealed Luxembourg’s role in multinational tax . . .
Americas
Walmart’s extensive use of tax havens exposed in report
Walmart has stashed billions in 78 subsidiaries and branches located in 15 overseas tax havens, employing well-known international tax strategies to avoid paying foreign taxes in countries where it has retail operations and US taxes on foreign earnings, writes Americans for Tax Fairness in a . . .
Europe
Luxembourg to appeal EU Commission’s finding that Fiat APA was illegal State aid
The Luxembourg government today announced that it will appeal the European Commission’s October 21 decision that an advance pricing agreement (APA) issued by Luxembourg to a Fiat subsidiary amounted to illegal. . .
Europe
Luxembourg issues rules on withholding tax rates for dividends paid to German funds
Luxembourg on February 9 released guidance on withholding rates to be applied when a Luxembourg company distributes dividends to German Sondervermögen, writes KPMG in a tax alert. For discussion, see KPMG.
Americas
US Senate Foreign Relations Committee approves eight long-pending tax treaties, Rand Paul not present for the vote
In a surprising development, the US Senate Committee on Foreign Relations on November 10 approved without amendment proposed income tax treaties with Chile, Hungary, and Poland; proposed tax protocols with Japan, Luxembourg, Spain, and Switzerland; and a proposed protocol amending the multilateral mutual administrative assistance treaty. . .
Europe
Luxembourg law outlines procedure for obtaining private tax rulings, arm’s length standard
Luxembourg’s Parliament on December 18 passed a law which sets out the procedures required to obtain a private tax ruling, thereby formalizing existing administrative practice, and which describes the application of the arm’s length principle in transfer pricing, writes EY in a December 19 tax alert. For discussion of the new legislation, see EY
Americas
EU Commission probes McDonald’s tax ruling on Luxembourg permanent establishment
The European Commission, on December 3, announced its fifth investigation into whether a private tax ruling granted by an EU State to a multinational corporation amounted to illegal State aid. This time, a ruling granted to McDonald’s by Luxembourg . . .
Americas
US Treasury official urges Senate committee to approve ratification of pending tax treaties
Witnesses testifying before the US Senate Committee on Foreign Relations on October 29 urged the committee to recommend ratification of eight pending US tax treaties and protocols, highlighting key aspects of the . . .
Europe
Luxembourg defends its tax practices
Luxembourg’s Ministry of Finance on December 10 defended its tax rulings practice and its record on tax transparency, claiming that “Luxembourg is a constructive, reliable player in the move towards greater transparency in tax matters.” Though not mentioning the matter directly, the Ministry also responds allegations stemming from the “Lux leak” . . .
Europe
Alex Pham to establish new tax department at Luxembourg firm, Kleyr Grasso
Alex Pham, has joined Luxembourg firm, Kleyr Grasso, to establish a new tax department there, the firm announced November 20. Pham’s experience includes international tax structuring, corporate tax, individual taxation, and VAT. See, release.
Belgium
EU Commission will scrutinize ‘Lux Leaks’ tax rulings for state aid violations, says competition chief
The European Commission intends to analyze leaked Luxembourg private tax rulings for evidence of illegal state aid, the European Union’s new competition chief, Margrethe Vestager, said November 20. “We consider the Lux-Leaks documents as market information. We will examine [them] and also therefore evaluate whether or not this will lead us to . . .
Europe
Journalists publish leaked advance rulings and tax returns, conclude that Luxembourg aids tax avoidance
The International Consortium of Investigative Journalists (ICIJ) on November 5 published confidential tax documents of PwC clients on the Internet accompanied by a series of news stories that conclude that Luxembourg has been a long-time partner in multinational corporation tax avoidance. The leaked documents include 548 Luxembourg advance rulings, or comfort letters; corporate tax returns . . .
Luxembourg defends tax rulings: “The rulings in Luxembourg are compatible with the Luxembourg legislation, compatible with the EU-legislation, and compatible with the OECD-conventions, and any other international conventions,” Minister of Finance, Pierre Gramegna, said November 6, at the Ecofin council in Brussels. See speech.
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Jean-Claude Juncker should resign says Bloomberg: Jean-Claude Juncker, the new president of the European Commission, has a “clear conflict of interest” as head of the body investigating the tax practices he oversaw as Luxembourg’s prime minister, says Bloomberg in a November 9 opinion piece. See, Bloomberg.
Andorra
Luxembourg and Andorra sign treaty to avoid double tax and prevent tax evasion
Luxembourg Finance Minister, Pierre Gramegna, and Jordi Cinca Mateos, Finance Minister of the Principality of Andorra, signed an agreement for the avoidance of double taxation and prevention of fiscal evasion between the two countries, according to a June 2 Luxembourg Ministry of Finance press release.
Asia-Pacific
UAE and Luxembourg sign protocol to amend tax treaty
UAE and Luxembourg on October 26 signed a protocol to amend the countries’ 2005 agreement on the avoidance of double taxation and prevention of fiscal evasion on income and capital. Release.
Europe
EU releases details of state aid probe into rulings granted by Ireland to Apple and by Luxembourg to Fiat
The European Commission on Sept. 30 published non-confidential versions of its decisions to open state aid investigations into private rulings granted to Apple in Ireland and Fiat in Luxembourg. . .
Belgium
Belgium poised to add Luxembourg to tax haven blacklist
Belgium will add Luxembourg to its tax haven blacklist, writes Luxemberger Wort in June 2 article, quoting Belgian media sources. Such a listing would create hassles for Luxembourg and Belgian companies engaged in cross-border business, as all transactions over 100,000 euros must be reported. See, Luxemburger Wort.
Europe
Europe
Europe
Luxembourg and France amend double tax treaty to permit source country taxation of indirect real estate transfers
Luxembourg and France on Sept. 5 signed the 4th amendment to their 1958 double tax agreement, providing for source country taxation of gains from the sale of shares of companies that primarily invest in immovable property, such as real estate. Text of the amendment (in French), release (in French). For analysis, see Arendt & Medernach, Loyens & Loeff, Baker & McKenzie
Americas
CRS report reveals extent of American MNE profit shifting, discusses tax reform options
The magnitude of profit shifting by American companies “may be significant,” a US Congressional Research Service (CRS) report has concluded. The report, released April 30, found that about 50 percent of the $1.2 trillion in overseas profit reported by American . . .
Europe
Luxembourg to disclose to EU Commission names of companies benefiting from rulings and IP regime
Luxembourg will provide the European Commission with a list of taxpayers that received private tax rulings in 2010–2012 involving cross-border dealings, as well as a list of the beneficiaries of its intellectual property regime, Prime Minister Xavier Bettel said December 18 . . .
Europe
Luxembourg draft budget addresses advance rulings and arm’s length standard
Luxembourg’s draft budget 2015, presented to Parliament on October 15, includes provisions that formalize and charge a fee for advance tax rulings, that modify transfer pricing provisions to make an explicit reference to the arm’s length standard, and that extend documentation requirements to related party transactions, writes KPMG’s member firm in Luxembourg. For details, see KPMG.
Americas
Luxembourg signs tax treaties with Hungary and Uruguay
Luxembourg Finance Minister Pierre Gramegna on March 11 signed tax treaties with representatives of Hungary and Uruguay while attending an Ecofin meeting . . .
Europe
Geoffrey Scardoni joins DLA Piper in Luxembourg
Geoffrey Scardoni has joined DLA Piper’s Luxembourg office as a partner on their tax team, the firm announced . . .
Europe
Europe
Juncker defends Luxembourg tax practices, calls for automatic exchange of private tax rulings
European Commission President Jean Claude Juncker on November 12 said advance tax rulings issued by Luxembourg to multinationals while he was the country’s prime minister were legal even though the rulings helped multinationals avoid tax due other European nations. Juncker was responding the uproar over the release of leaked taxpayer private rulings and tax returns which were . . .
Europe
EU’s Juncker survives censure motion over role in multinational tax avoidance
The EU Commission’s new president, Jean-Claude Juncker, on November 27, survived a no-confidence vote in European parliament brought on account of the ‘Lux leak” revelations that Luxembourg helped scores of multinationals avoid tax while he was prime minister. The censure motion . . .
Europe
Tax rulings granted to Starbucks by Netherlands and to Fiat by Luxembourg are illegal state aid, EU Commission rules
The European Commission today announced that it has determined that advance pricing agreements granted to a Starbucks subsidiary by The Netherlands and to Fiat subsidiary by Luxembourg were illegal state aid because they sanctioned the allocation of too little profit to activities in those countries and . . .
Europe
Former PwC auditor charged in Lux Leaks theft
Former PwC auditor, Antoine Deltour, was charged with multiple crimes in Luxembourg on December 12 for stealing and leaking confidential PwC client advance tax rulings and other documents that were later placed on the Internet by the International Consortium of Investigative Journalists (ICIJ). He has admitted his involvement, but says that he did not provide all the material released on the ICIJ website. See, Blomberg, The Guardian, Luxemburger Wort, The Irish Times.
Europe
Isle of Man
Isle of Man-Luxembourg tax treaty enters into force
The Isle of Man has announced that its Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and on Capital with Luxembourg, signed April 8, 2013, entered into force on August 5. Press release, treaty text.
Europe
EU says Luxembourg APA does not price Amazon intra-group royalties at arm’s length, likely violating state aid
An advance pricing agreement (APA) issued to Amazon by the Luxembourg tax authorities setting the price of intra-group royalties seems to be designed to ensure a predictable level of profit to Amazon’s Luxembourg operations rather than to achieve an arm’s length result, and thus appears likely to be state aid, the European Commission . . .
Czech Republic
Tax treaty between Luxembourg and Czech Republic enters into force
The requirements for the entry into force of the treaty between Luxembourg and the Czech Republic, signed March 5, 2013, were met on July 31 and the treaty entered into force as of that date, the Luxembourg tax authority has announced. Release (in French), A Memorial – No. 162 of August 14, page A 2501 (in French)
