Tax Structuring Opportunities Created: Luxembourg Removed From Grey List

In December 2010, following a multinational effort to limit tax havens, Luxembourg terminated the existence of its famous 1929 holding company structure. Three months later, in March 2011, Brazil removed Luxembourg from its list of privileged tax regimes. The removal of Luxembourg from this list creates new tax structuring opportunities that multinational corporations may wish to consider.

Brazil's list of privileged tax regimes, known as the 'Grey List', aims to penalise jurisdictions that grant undesirable preferential tax treatment by subjecting them to restrictions. 'Privileged tax regimes' are defined as regimes which:

• do not tax income, or tax income at a maximum rate " lower than 20%;