ATOZ Insights - December 2016

Now that we are in the home stretch of 2016, some last minute tax measures have been presented. At local level, following the draft law on the 2017 tax reform presented over the summer, additional tax measures have been presented as part of the 2017 budget, introducing notably a more robust framework for transfer pricing. The Luxembourg VAT authorities released the long-awaited Circular on the VAT treatment applicable to directors' fees. Luxembourg has also started implementing some of the BEPS measures recently introduced at EU level: a draft law has been presented to Parliament to introduce Country-by-Country reporting. Finally, we come back to the draft law aiming at anticipating an upcoming amendment to the US-Luxembourg double tax treaty which would end situations of double non-taxation resulting from different interpretations of the permanent establishment (PE) concept: the Luxembourg State Council has recently concluded that this draft law was unconstitutional. In this issue of ATOZ Insights, we explain the reasons behind the Luxembourg State Council's conclusion and what it means for the upcoming changes.

At European level, only 4 months after the adoption of the EU Anti-Tax Avoidance Directive (ATAD), the European Commission has presented an additional package of tax...