New Bill On Luxembourg 2017 Tax Reform

Bill of law n°7020 amends and confirms the new tax measures previously announced:

1. Corporate income tax (CIT)

1.1 Introduction of a 17 year limitation on the use of tax losses as from 2017

The limitation will apply from 2017. Tax losses generated until December 31, 2016 can continue to be carried forward indefinitely. The oldest tax losses would be offset first.

The current proposal for the limitation in time to 17 years is good news as it was initially announced that tax losses generated after 2016 would be useable for a shorter period of time (10 years) and only up to a certain percentage (e.g. 80%) of the taxable profit per year. Even if the draft bill may still be subject to amendments, we believe that the limitation of the use of the tax losses to a certain percentage of the taxable profit will be very likely abandoned.