After a long and rainy winter, we welcome the spring edition of our Keeping up with Tax for Banking and Capital Markets!
This edition is picking up on a range of current topics and latest tax developments relevant to our industry which should require our attention in the coming months.
Specifically, the articles cover the following areas:
- Get ready with the first CESOP reporting
- Applying for the new Luxembourg investment tax credit regime
- 6 statements and 5 charts about tax controversy in Luxembourg
- Luxembourg enacted the law to implement global minimum tax
On top of these new hot topics of interest to our industry, you will find at the end of this spring edition the latest trends and insights for 2024.
Get in touch with us or your regular PwC contacts if there is anything that you would like to discuss further.
Kind regards,
Murielle Filipucci and Nenad Ilic
Get ready with the first CESOP reporting
Pursuant to Council Directive (EU) 2020/284 (“CESOP Directive”, “the Directive”), effective 1 January 2024 all payment service providers within the European Union (“EU”) are obliged to report specific cross-border payment transactions conducted on behalf of clients, as part of the EU's initiative to combat Value-Added Tax fraud. These recent provisions require payment service providers to deliver comprehensive details regarding processed payments. These entities are obligated to maintain records of cross-border payment data, and to share them with the tax authorities of EU Member States on a quarterly basis, commencing April 2024.
Applying for the new Luxembourg investment tax credit regime
On 22 December 2023, Luxembourg Parliament voted to approve bill n°8276 (hereafter “the Law”) revamping the investment tax credits available under article 152bis of the Luxembourg Income Tax Law (“LITL”). The aim of the Law is notably to support Luxembourg companies in their digital and ecological/energetic transformation.
The Law entered into force as from fiscal year 2024 (i.e. financial year closing on or after 1 January 2024).
Six statements and five charts about tax controversy in Luxembourg
Taxpayers are confronted with uncertainty in a complex tax world. Like in many other countries, the Luxembourg tax landscape has shifted from a realm of certainty (often captured in a tax ruling) to a territory of tax risk management (sometimes ending in a tax dispute with tax authorities). The combination of sophisticated tax rules, the lack of clarity in their interpretation, the significant amount of tax-related information exchanged between tax authorities on a national and international level, and the pressing need for governments to collect additional revenues inevitably leads to significant uncertainty when it comes to the assessment of tax risks.
Luxembourg enacted the law to implement global minimum tax
On 20 December 2023, Luxembourg parliament voted to approve the draft law n°8292 (hereafter “the Law”) that enters into force as from fiscal years starting on or after 31 December 2023. The Law transposes the EU Council Directive 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the Union, known as the EU Pillar Two Directive or the GloBE Directive (Global anti-Base Erosion Directive). The Directive aims to implement a jurisdictional minimum taxation of at least 15% and is based on the OECD Model Rules on Pillar Two that were released on 20 December 2021, with some necessary adjustments to guarantee conformity with EU law. The rules apply specifically for groups with a consolidated revenue of at least 750 million euros in at least two of the four fiscal years preceding the tested fiscal year.
Latest trends and insights for 2024
