Luxembourg – The new nexus of IP

04 Oct 2017

If your first thought when reading the headline makes you go back to your childhood of science-fiction, space odyssey or Greek mythology books and movies…then don’t feel embarrassed, you’re in good company! But indeed, nexus isn’t a divine place for gods nor the space beyond a black-hole but the technical reality of Luxembourg’s former and new Intellectual Property (IP) regime…apologies for the teaser.

Introduction

Luxembourg’s Parliament released in August 2017 the draft bill for a new IP tax regime compliant with OECD BEPS action plan (Action 5 – substantial activity requirement).

Both, the former as well as the proposed new IP tax regime regimes are based on the so-called nexus approach. The nexus is a direct connection between assets, expenditures and income. Only assets, income and expenditures which are closely IP related are eligible and qualify for tax exemption purposes. The draft bill intends to introduce a modified nexus approach.

 

Click here to read the full article and understand more, including the General Features and what will change under the new regime

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