Asset managers consider tax structuring to be a key element to make their investment structure more attractive, sustainable and distinctive for investors to fit their needs.
In this respect, we are assisting our local and international clients from the fund set-up to the (re)-structuring and merger (both at fund and management company level) to achieve the most tax efficient structure.
With respect to the indirect taxation, we ensure the accurate subscription tax qualification of the fund; we provide detailed tax landscape of fund’s ongoing life cycle; we provide gap analysis; we perform prospectus’ review, etc.
Our PwC Luxembourg tax team can assist Luxembourg management companies in the preparation and the e-filing of their annual corporate income tax returns as well as in the computation and/or review of your annual tax provisions.
Our team can assist Luxembourg funds and management companies in the preparation of the withholding tax return upon distribution of dividends or directors' fees.
The role and shape of the tax function had changed significantly as it became a must have and a competitive advantage for asset managers who should monitor and supervise the delegated tax function. It is also a clear requirement from the ESG regulation framework. To do so an adequate and strong tax function should be set-up/enhanced. Robust tax function is access to tax knowledge, appropriate and knowledgeable people and robust processes.
We will conduct gap analysis, provide recommendations and processes and supply you with the necessary tools and updated / specialized tax information to help you setting up or reinforcing an appropriate tax function. All along your way, you will also have a direct link to our knowledge via our Tax Hotline Service and our dedicated tax team.
Luxembourg funds and foreign investment funds which invest globally could face or have to fulfil local tax compliance obligations in a variety of countries. The local tax compliance obligations vary depending on the country of investment, the type of instrument and the type of income received, from a one-off initial tax registration to the filing of periodic local tax returns.
One of these obligations could imply the appointment of a tax representative, that takes care of local tax formalities on behalf of the foreign investor / fund. Therefore, with the assistance of the PwC network, we ensure a proper local tax compliance within the fund's investment country (e.g. India, Romania, Pakistan, Bangladesh, Taiwan, etc.) and you benefit from the advantage of dealing with a single contact person in Luxembourg that can coordinate your complete range of investment countries.
ITV (International Tax View) enhances how companies host, display, access and share capital gains and withholding tax information and commentary for their investment positions for over 130 jurisdictions. ITV offers a broad, but comprehensive view of capital gains and withholding tax rates for their investment positions in numerous jurisdictions while also providing (i) detailed commentary of the domestic tax treatment of income derived from various asset classes, (ii) withholding and refund procedures, (iii) domestic filing obligations and (iv) commentary on a country’s approach to obtaining double tax treaty relief for specific fund vehicle.
The fund industry is facing unprecedent challenges as the tax landscape continues to grow in complexity at international, European and national levels. The world is evolving quickly with technology changing the way we live and work. Tax is also impacted and business not ready to implement technology are more likely to miss economy of scale and reinforced efficiency. Our experience shows that asset managers are facing more and more investor tax queries on the oversight and tax efficiency of the structure.
To face this challenge and be equipped for your monitoring and oversight obligations, we have developed an- easy-to-use solution for non-tax experts, Portfolio Tax Scanner. With our innovative and user-friendly AWM tax solution, we are assisting local and international clients in identifying, monitoring and optimising their portfolio's tax exposure: identification of the tax inefficiencies / inaccuracies in your investment strategy and of the related tax efficiency opportunities (Fokus claim, double tax treaty relief, etc.). In a single view, our solution highlights your portfolio's tax exposure through a heatmap and, upon your request, we can assist you in creating a more in-depth and tailor-made tax analysis to increase your portfolio's tax efficiency.
The dividend withholding tax reclaim according to the so-called "Fokus Bank" case is an opportunity for investment funds to recover up to 30% of withholding tax borne in the EU / EEA on dividends received up to 5 years ago. This opportunity is available for both UCITS and non-UCITS funds set-up either as a SICAV or FCP (depending on the country at stake) and is also available for interest withholding tax in Poland and Portugal.
We can assist both Luxembourg and foreign funds from the cost/benefit analysis to the repayment (i.e. analysis of the recoverable amount, preparation and filing of the filing of the claim, etc.) to help them to optimize their return on investment.
In today’s global economic context, the actors of the financial sector are currently experiencing low return on debt and equity investment.
The withholding tax applied on the incomes derived from the investments significantly decreases the net return on income and therefore recovering the excess of tax based on the reduced double tax treaty rate will help you enhancing financial clients’ portfolio performance.
The potentially reclaimable tax amount based on double tax treaties creates opportunities to improve the performance for clients and to create a new source of income for financial sector professionals. Double Tax Treaty reclaim is a fastidious and complex procedure with heavy documentation requirements. Each jurisdiction has its own procedures, which requires broad and deep technical expertise.
Our Double Tax Treaty reclaim managed services are based on a centralized and automated solution which creates cost-benefit analysis and the tax reclaim package for the clients ready to be sent.
Partner, Asset and Wealth Management Tax Leader, PwC Luxembourg
Tel: +352 49 48 48 5469