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ARTICLE · 04 APRIL 2022

Interest Limitation Rules: Extended To Luxembourg EU Regulated Securitisation Vehicles

Maples Group
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On 9 March 2022, the Luxembourg Parliament published a draft law, which proposes to revoke an exemption available for EU regulated Luxembourg securitisation vehicles ("SVs")...

European UnionTax
James O'Neal
James O'Neal
Jean-Dominique Morelli
Jean-Dominique Morelli
Arnaud Arrecgros
Arnaud Arrecgros
Andrew Quinn
Andrew Quinn
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On 9 March 2022, the Luxembourg Parliament published a draft law1, which proposes to revoke an exemption available for EU regulated Luxembourg securitisation vehicles ("SVs") from Luxembourg's interest limitation rules ("ILRs"). The draft law is expected to enter into force as of 1 January 2023.

If the draft law is enacted in the form published, these Luxembourg SVs will be subject to the ILRs and may be at risk of increasing their Luxembourg corporate tax exposure, in light of potential deductibility limitations on payments made to SV investors.

The draft law stems from a formal notice letter sent by the European Commission ("EC") in 2020 advising Luxembourg to remove the ILRs exemption applicable to EU regulated Luxembourg SVs2.

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