On 26 July 2018, the Luxembourg direct tax authorities published
Circular L.I.R. No. 14/5 – 99/3 – 99bis/3
("Circular") providing useful guidance
on the tax treatment of income generated by Luxembourg taxpayers
through virtual currencies ("VCs"), in
particular in the framework of their disposal or creation
(mining).
The Circular sets out the following main points:
- VCs do not constitute any currency.
Thus, Luxembourg taxpayers can neither establish their accounts nor
declare their taxable income in VCs.
- VCs are considered intangible assets
for Luxembourg tax purposes.
- The use of VCs in a transaction does
not influence the nature of any such transaction for Luxembourg tax
purposes.
