Luxembourg: New R&D incentives expected in 2017 tax reform package

Luxembourg: New R&D incentives expected in 2017

With repeal of the Luxembourg intellectual property (IP) regime, businesses and international investors have been eagerly awaiting news about what the future would hold for research and development (R&D) activities. The government will be phasing out the old regime as from July 2016 because the existing rules run counter to the new international framework endorsed by both the EU and OECD, known as the “nexus” approach.

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The repeal of the current IP regime left the business community wondering what the government might propose as an alternative solution. Luxembourg’s Finance Minister last week revealed his plans for a “new-look regime,” and confirmed that the Luxembourg government is already working on the finer details of an alternative IP measure. Although several options are under consideration, all options appear to share the same clear objective of providing rules that would both be compliant with the “nexus” approach while also acting as an incentive for R&D.

 

Read a February 2016 blog posting from the KPMG member firm in Luxembourg: New R&D incentives to be included in the 2017 tax reform package, says Gramegna

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