Latest trends and insights for 2024
On 20 February 2024, the Economic and Financial Affairs Council adopted a revised EU list of non-cooperative jurisdictions for tax purposes.
The list is now composed of 12 jurisdictions: Antigua and Barbuda; American Samoa; Anguilla; Fiji; Guam; Palau; Panama; Russia; Samoa; Trinidad and Tobago; US Virgin Islands; Vanuatu.
Four countries have been removed from the list of non-cooperative jurisdictions for tax purposes: The Bahamas; Belize; The Seychelles; Turks and Caicos Islands.
On 10 November 2023, the Luxembourg constitutional court ruled that the Luxembourg minimum net wealth tax (hereafter NWT) regime is partly unconstitutional as it leads to a discriminatory situation amongst certain taxpayers in a similar situation.
The decision of the constitutional court only has an impact on taxpayers whose total balance sheet is comprised between EUR 350,000 and EUR 2,000,000 and who have aggregated fixed financial assets, transferable securities, inter-company receivables, and cash in excess of 90% of their total balance sheet. Such taxpayers should, pending a change in the NWT law, be subject to the minimum NWT of EUR 1,605 instead of EUR 4,815.
Taxpayers liable to the minimum NWT of EUR 4,815 should assess their situation to determine whether the lower NWT charge of EUR 1,605 could be applicable to them. For more information, click here.
On 21 December 2023, the CJEU concluded that although a director would be seen as performing an economic activity, the latter would not be considered as acting independently, implying that such a director would not be considered as a taxable person and VAT would not apply on the consideration paid by the company.
Luxembourg directors that are currently registered for VAT purposes may now consider filing a VAT deregistration application provided that they do not have any other economic activities and provided that they meet the conditions for not acting independently.
For more information, click here.
Contact us
David Schaefer
Tax Partner, VAT, PwC Luxembourg
Tel: +352 49 48 48 3202
Email
DAC 7 introduces new requirement for reporting platform operations but also strengthens data protection requirements of data controllers in the context of the automatic exchange of information and administrative cooperation (DAC 2 and DAC6).
Indeed, financial institutions are now required to notify the natural persons that are subject to the CRS reporting (i.e. direct investors and Controlling Persons of corporate investors qualifying as Passive NFEs) regarding the information that will be subject to the exchange of information. It impacts banks as financial institutions which have to exchange data for CRS reporting purposes with respect to their clients. But it also concerns banks acting as Transfer Agents which will take in charge the CRS reporting and the notification letters to the investors of the funds under their scope of responsibility.
Such notification needs to be sent at least one month prior to the filing of the CRS report. These notifications must include at least the following information:
- The purpose of the processing for which the personal data is intended as well as the legal basis for the processing, i.e. reporting obligations under the CRS law.
- The recipient(s) of the data, i.e. the Luxembourg tax authorities and the tax authorities of the jurisdiction(s) the data will be exchanged with.
- Personal data of the individual, i.e. name, address, type of Controlling Persons (if relevant), jurisdiction of tax residency(ies) and Tax Identification Number (TIN).
- The category of financial data that will be reported under CRS, i.e. the account balance at year end and the total gross amount paid or credited (but this can remain generic).
- The individual’s rights of access and rectification as per the GDPR with an indication on how these rights could be exercised.
In practice we recommend sending the letters at the end of April or mid-May at the latest to manage potential queries of investors/clients and to amend the CRS reporting if necessary. It is important to perform a critical review of the data based on data quality and consistency checks before sending the letters to investors.
For more information, click here.
