2025 Tax Panorama - 27 February 2025

Our Forvis Mazars Advisory Team is happy to present you on February 27th, 2025 the main Luxembourg and international tax updates to be considered in the frame of your business. 

 

> Place: INNSiDE by Meliá, 12 Rue Henri M. Schnadt, 2530 Gasperich Luxembourg

> Date: 27 February 2025 from 10:30 AM to 12:30 PM

Register here

 

We will cover the following main topics during this event:

I. Direct tax

  • Direct tax updates following the issuance of the 2025 tax laws (e.g., reduction of the corporate income tax rates, amendment of the net wealth tax rules, etc.).
  • Tax regime to be applied on classes of shares.
  • Tax regime applicable to dissolution without liquidation.
  • Specific tax updates for undertakings for collective investment in transferable securities (“UCITS”) and société de gestion de patrimoine familial (“SPF”).
  • Public Country-by-country reporting.  

 

II. Transfer pricing

  • Increasing Documentation Requirements : According to a Bill of Law presented by the government on March 28, 2023, multinational enterprises will have to submit a Master File containing information on their global business and transfer pricing strategies. The Local File, which will be added to the Master File, shall offer comprehensive details on intercompany transactions as of the fiscal year 2024.
  • Tax Audit: Increased scrutiny by tax authorities on transfer pricing issues has significantly intensified.
  • Debt-to-Equity Ratio: A critical element in transfer pricing for Luxembourg, particularly in the context of intra-group financing arrangements to ensure that the intercompany financing terms comply with the arm's length principle.

 

III. Operational tax

  • Pillar 2: Pillar II is part of the OECD's broader global tax reform aimed at tackling tax base erosion and profit shifting (BEPS). The initiative seeks to create a fairer international tax system by establishing a minimum effective tax rate.
  • Faster: Introduction of a single digital tax residence certificate for both individuals and corporate entities. The objective is to streamline withholding tax procedures within the EU, enhancing efficiency and security for investors, financial intermediaries, and national tax administrations.

 

IV. VAT

  • Presentation of the main key VAT updates following the transposition of two EU Directives into the Luxembourg VAT Law (e.g., increase of the domestic threshold for small business scheme, introduction of a scheme for EUR small business, etc.).
  • Latest development on VAT exemption for investment fund management (joint cases C-639/22 to C-644/22 related to pension funds).
  • New VAT rules applicable to Director’s fees in Luxembourg.

 

V. Personal Tax

Director’s fees: Tax compliance obligations in connection with Director fees:

  • Reporting to be done to the tax authorities by the paying agent.
  • Potential tax filing obligations for the Director (upon conditions).

2025 topics: Update on the new measures following the issuance of the 2025 tax law.

 

 

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