Luxembourg Budget Bill Repeals IP Tax Regime | KPMG | CA

Luxembourg Budget Bill Repeals IP Tax Regime

Luxembourg Budget Bill Repeals IP Tax Regime

Global Tax Adviser, October 27, 2015. Luxembourg's proposals in a new budget bill for 2016 show first steps towards implementing the OECD BEPS recommendations. The bill, submitted October 14, 2015, repeals the country's current tax treatment of intellectual property (IP), a regime which currently provides a corporate income tax exemption of 80% of net income and capital gains deriving from qualifying IP rights, as well as a full net wealth tax exemption. Luxembourg has also released a second bill that amends its net wealth tax regime and introduces certain measures for individuals.


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Repealing the IP regime is a first step towards compliance with the "nexus" approach, a recommendation for IP regimes in the BEPS Action 5. Provisions implementing a new IP regime in line with the "nexus" approach are expected in the coming months. 


The OECD released its final recommendations for its 15-point Action Plan to address base erosion and profit shifting (BEPS) on October 5, 2015. The recommendations focus on key BEPS areas including hybrid mismatch arrangements, controlled foreign corporation rules, transfer pricing, aggressive tax planning, and greater transparency and disclosure, among other issues.

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Information is current to October 27, 2015. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500.

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