Luxembourg: New Guidelines for Intra-Group Financing

31 Jul 2017

Please refer to the Luxembourg News Flash of January 2nd, 2017 and note that the deadline for any assessments, adjustments or applications is December 31st, 2017.

On December 27th, 2016 the Head of Luxembourg tax authorities issued new guidelines relating to the tax treatment of Luxembourg companies carrying out intra-group financing transactions (the Circular).

Whereas the previous Circular of 2011 stated that it applied to entities which principally engage in financing activity (thus excluding holding entities), the new Circular of 2016 no longer makes any reference to the extent of the financing activity which entails that per se a holding company falls into the scope of the Circular.

Frank Walenta, ZEDRA Commercial Director, writes that companies financing affiliated group entities today are heavily scrutinised and challenged by tax authorities, not only in Luxembourg.

“Our recommendation at ZEDRA is that it’s now really time to encourage clients to have their intra-group financing structures reviewed and, in case of need, properly adjusted or even re-structured so as to be future-proof.”

The new guidelines are to be read in conjunction with the arm’s length principle on transactions between related parties (controlled transactions) as laid down in Luxembourg Tax Law


Click here for the full article.

For more information about this please contact Frank Walenta: