February 2020

The Luxembourg Parliament on December 19, 2019 voted to approve the law implementing the EU ATAD regarding hybrid mismatches with third countries into Luxembourg domestic law (ATAD 2 Law). The ATAD 2 Law follows the text of ATAD 2 rather closely, adapting it mainly to integrate with the structure and terminology used in the Luxembourg Income Tax Law (LITL). Note that the reports of the State Council and the Budget and Finance Commission left the text of the legislation largely unaltered from the bill submitted to Parliament in August 2019. However, the Budget and Finance Commission stated that further guidance, potentially in line with what is emanating from the State Council, may be appropriate in the form of a tax authority Circular or a Grand-Ducal decree addressing various points. Unfortunately, there is no certainty over when, or even whether, such a Circular or GrandDucal Decree might be issued.

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