The Luxembourg tax authorities published a version of circular L.G. – A. n° 61 (PDF | 306KB) regarding certificates of tax residence for Undertakings for Collective Investments (UCIs) on 8 December 2017.
The updated circular supersedes the previous version, dated 12 February 2015. For more details on that version, see our e-alert of 26 August 2015.
The circular now covers Reserved Alternative Investment Funds (RAIFs). It also now takes into account new double tax treaties (DTTs) signed by Luxembourg which have been updated to include UCIs in their scope.
Certificates of tax residence for UCIs
The request procedure for UCIs to obtain Certificates of Tax Residence (COTR) remains the same, with the small addition that they now have to provide their tax number.
On this basis, the documents/information needed by UCIs to obtain COTRs are the following:
Certificates of tax residence for RAIFs
The circular covers RAIFs that have opted for the regime provided for by article 45 of the law of 23 July 2016.
RAIFs that are taxed in the same way as UCIs are therefore subject to the same restrictions when requesting a COTR. Additionally, the list of countries for which the Luxembourg tax authorities deliver COTRs is the same as for UCIs.
However, the procedure for a RAIF to obtain a COTR does differ slightly. The COTR request in countries where, based on the circular, the DTT applies to SICAVs/FCPs has to be filed by the RAIF or its custodian bank. The requestor must also provide the tax number, date of constitution, and RAIF’s address. The tax inspector may ask for additional information or documents, too, if he/she deems them necessary for preparing the COTR (e.g. a certificate of revenue).
In addition, in cases where a COTR is requested by a RAIF based on domestic law (i.e. where the DTT does not apply, based on the circular), the following information will have to be provided too:
The COTR will be sent to the RAIF’s statutory seat by the Luxembourg tax authorities.
Finally, it should be noted that the circular expressly excludes from its scope RAIFs that have opted for the regime provided for by article 48 of the law of 23 July 2016. These RAIFs are regarded as Sociétés d’Investissement à Capital Risque (SICAR) from a tax perspective and can therefore obtain COTRs under the same conditions as regular Luxembourg companies.
Scope of double conventions covered by the circular
The circular takes into account the latest DTTs concluded by Luxembourg as well as amendments made to existing DTTs. Please find below a list of the new countries where Luxembourg UCIs and RAIFs can obtain a COTR based on DTTs.
Notably, UCIs or RAIFs will not be able to obtain a COTR based on the 1997 DTT concluded between Luxembourg and the Ukraine (which will enter into force on 1 January 2018).
|COTR based on the application of a DTT|
KPMG Luxembourg comment
This circular brings long-awaited clarification that RAIFs can now request COTRs under the same conditions as other UCIs. This should allow RAIFs to benefit from the Luxembourg DTT network and to obtain COTRs to file EU tax reclaims.
It is also important to see that the new circular now encompasses newly applicable DTTs. Also notable is that many of the newly concluded DTTs make reference to UCIs in general. This fact should allow both SICAVs and FCPs to benefit from DTT provisions.
We would strongly advise you to regularly consult the website of the tax authorities, as the circular will likely be updated frequently.
KPMG can assist you with filing DTT reclaims and with obtaining exemptions at source. Should you have any questions, please contact us.
Any tax advice in this communication is not intended or written by KPMG to be used, and cannot be used, by a client or any other person or entity for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing, or recommending to another party any matters addressed herein.
The information contained herein 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 on such information without appropriate professional advice after a thorough examination of the particular situation.