On 8 August 2019, two new Bills (No 7465 and No 7466) were
introduced to the Luxembourg Parliament (Chambre des
Députés). They will transpose Directive 2017/952/EU
on hybrid mismatch arrangements (ATAD II) and Directive 2018/822 on
mandatory tax disclosure rules (DAC 6) into Luxembourg law.
The ATAD II Bill has two provisions which are of particular
relevance for the Luxembourg investment funds industry.
First, the Bill carves out "collective investment
vehicles" (CIVs) from the application of the reverse hybrid
mismatch rule (article 9a of ATAD II).
The reverse hybrid mismatch rule would require Luxembourg to
treat certain tax transparent entities, such as a common or special
limited partnership, as tax opaque entities and tax them on income
which is not otherwise subject to taxation, in the event that a
certain proportion of investors view such entities as tax opaque in
their jurisdiction. While the introduction of a carve-out for CIVs
from this rule was
