Covid-19 – Support for Luxembourg taxpayers

Direct taxes

Please find here the link to the ACD newsletter (in French):

https://impotsdirects.public.lu/fr/archive/newsletter/2020/nl17032020.html 

Taxpayers in scope

The measures apply to companies subject to Corporate Income Tax (CIT), Municipal Business Tax (MBT) and Net Wealth Tax (NWT); and to legal and natural persons deriving business income, or agricultural and forestry income profits, or non-commercial income (i.e. "professions libérales"). 

Measures

These taxpayers may request all or any of the following reliefs:

• Non-payment of tax advances normally due in relation to the first and second quarters of 2020. In practice, for taxpayers subject to CIT and MBT, this means the cancellation of CIT advances normally due on 10 March 2020, and 10 June 2020, and of MBT advances normally due on 10 February 2020 and 10 May 2020. Here is a link to the request form: https://impotsdirects.public.lu/dam-assets/fr/formulaires/covid/annulationavances.pdf 

• Deferred payment of CIT, MBT and NWT liabilities due. For any CIT, MBT and NWT due as from 1 March 2020, taxpayers may request a 4-month deferral, starting as from the due date of the tax concerned (this is not the date of the tax assessment itself, but rather the date on which those taxes should be paid as per the "décompte d'impôt"). Here is the link to the request form: https://impotsdirects.public.lu/dam-assets/fr/formulaires/covid/delaipaiement.pdf

• Deferral of the filing date for tax returns. Tax returns for the 2019 tax year for both personal taxpayers and corporate taxpayers now do not need to be filed until 30 June 2020. 

The ACD newsletter notes that any cancellation of tax advances, or deferred payment, requests should be accepted automatically, to the extent that the above conditions are met. Please note however that the forms provided by the ACD do require a short justification for the cancellation of advances, or deferred payment. The ACD provides no further guidance in this respect. Given that the form provides only two lines for the justification, we would however expect that a rather straightforward statement (for example; "the company is facing liquidity issues") should be satisfactory. 

A few additional clarifications are made, as follows:

• The above requests should be completed, signed, and sent via regular mail, or by email, to the relevant tax office. 

• Obligations to pay over taxes withheld on salaries cannot benefit from the deferral. 

• A deferral request is possible only for CIT, MBT, or NWT that is otherwise due on or after 1 March 2020, and not before. 

• NWT advances do not benefit from the cancellation of advances measure foreseen above. 

• It is also possible to request a reduction of the CIT and MBT advances, instead of cancellation. To do so, the taxpayer should send a letter to its relevant tax office detailing the amount of the reduction requested, and the reason for requesting such a reduction. 

Value Added Tax

The Luxembourg VAT Administration have stated, in a brief news bulletin posted on their website on 18 March 2020, that, until further notice, as a matter of administrative tolerance, no fines will be levied when VAT returns are filed late. Normally, such fines are system-generated as soon any deadline elapses, and can range between EUR 250 and EUR 10,000.

Also on 18 March 2020, the Luxembourg Ministry of Finance announced that the authorities will automatically pay back, starting from this week, all VAT credit balances of up to EUR 10,000, in order to help some 20,000 businesses in Luxembourg cope with possible initial liquidity issues. Here is a link to the announcement (in French).

https://mfin.gouvernement.lu/fr/actualites.gouvernement%2Bfr%2Bactualites%2Btoutes_actualites%2Bcommuniques%2B2020%2B03-mars%2B17-mesures-fiscales-covid19.html

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