ATOZ Insights - April 2017

2016 was busy for tax until the very end: on 27 December 2016, the Luxembourg tax authorities released a circular, introducing new guidelines effective as from 1 January 2017, on the TP and substance requirements applicable to Luxembourg finance companies. This change should keep companies involved in financing activities and their advisers busy for a while. They will have to review transfer pricing policy and related transfer pricing documentation to make sure that these are in line with the new requirements. In February 2017, two additional circulars followed, one of which aims to clarify the direct tax implications of the application of VAT to directors' fees from 2017. Luxembourg continues to expand its extensive tax treaty network with the recent ratification of five additional tax treaties in December 2016. As far as indirect tax aspects are concerned, we comment the recent clarifications provided by the Luxembourg VAT authorities on the VAT treatment of SCSps.