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ARTICLE · 03 AUGUST 2023

Administrative Tribunal Decides In Case Concerning Classes Of Shares

Atoz Tax Advisers
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On 14 June 2023, the Administrative Tribunal (the "Tribunal") ruled on whether the use of classes of shares can be considered as an abuse of law. The transaction challenged by the tax authorities...

LuxembourgTax
Hugues Henaff
Hugues Henaff
Marie Bentley
Marie Bentley

OUR INSIGHTS AT A GLANCE

  • On 14 June 2023, the Administrative Tribunal ruled on whether the use of classes of shares can be considered as an abuse of law.
  • The transaction challenged by the tax authorities was the redemption by a Luxembourg company of the class "J" shares and the class "JJ" shares, respectively held by its two Russian individual shareholders, immediately followed by the cancellation of said shares.
  • The Tribunal decided that the LTA was right to confirm the existence of an abuse of rights and, consequently, the application of a 15% withholding tax to the entire amount paid.
  • Hereafter, we analyse the grounds on which the Tribunal considered the existence of an abuse and put this judgment into

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