The tax/VAT landscape in Luxembourg is changing, the new tax
reform substantially increasing penalties for governance
infringements. Thus, properly monitoring VAT obligations has become
very important.
On a European level, services related to immovable property have
been heavily discussed and inconsistently applied in the Member
States, leading to double taxation or to non-taxation. Naturally,
this has raised discussions about VAT registration obligations.
Therefore, it's not just asset or fund managers managing
real estate portfolios who are affected by the new rules and
explanatory notes effective 1 January 2017, but also legal or tax
advisors.
The current context
According to the European VAT legislation, the place where
immovable-property-related services should be taxed is defined by
Article 47 of the VAT Directive, which provides that it shall be
where the immovable property is located. The purpose of that
particular provision is to ensure taxation at
