Summary of the judgment The European Court of Justice (ECJ) has on 12 September 2006 decided that the UK’s controlled foreign company (CFC) legislation can not be used to levy UK tax on the profits of low-taxed companies based in other EU member states, where such companies carry on genuine economic activities there.…
Legal News
17 October 2006
New investment vehicle under discussion – SOGEPAF – alternative to holding 1929
A new investment vehicle designed for private investors will most probably be introduced in the next couple of months, currently named the SOGEPAF (“société de gestion de patrimoine familial“). A draft bill is currently under discussion but not yet set before Parliament to provide this new Luxembourg investment…
21 August 2006
CSSF – guidelines on the concept of risk capital for SICARs
On 5 April 2006, the CSSF issued a circular letter (06/41) (the “Circular”) containing guidelines and clarifications on the criteria applied by the CSSF when assessing whether a project is eligible under the SICAR law or not. We refer to the section client memorandums on our website for an outline of the SICAR law,…
18 August 2006
New law on takeover bids – in the aftermath of the battle between Arcelor and Mittal Steel
As a result of a hostile takeover bid on 27 January 2006 by Mittal Steel on Arcelor, the Luxembourg parliament has adopted the law of 19 May 2006 pertaining to the implementation of Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on takeover bids (the “Takeover Law”). Previously…
9 August 2006
Real Estate – amendment of double tax treaty between France and Luxembourg – alternative structures
The double tax treaty between France and Luxembourg is about to be modified by an amendment which will change within the next months the conditions of taxation for Luxembourg companies holding real estate situated in France. Luxembourg and France have entered into a side-letter “avenant” to the double tax treaty (the…
9 August 2006
1929 Holding companies
The European Commission has announced on 19 July 2006 that the Holding 1929 regime violated EU state aid rules (article 87 EC Treaty) and distorted competition and that the regime must be cancelled by the end of 2010. The Luxembourg government (and more in particular M. Luc Frieden, Minister of Justice) stays confident…
9 August 2006
Abolishment of net worth tax – final withholding tax of 10%
Abolishment of net worth tax The law of 21 June 2005 provides for the abolition of net worth tax for individuals as of 1 January 2006. This is an important change in the law, as previously Luxembourg tax authorities applied a 0,5% net wealth tax on individuals. This abolishment is certainly interested for foreign individuals…
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