New Protocol To The Income Tax Treaty Between Luxembourg And Poland

Besides introducing an OECD-compliant full exchange of tax information procedure (still excluding "fishing expeditions"), the major changes to the Treaty concern the introduction of an anti-abuse/limitation on benefits provision which is new ground in Luxembourg tax treaty policy and the possibility for the situs state to tax the sale of shares in a "land-rich" entity (provided however that domestic tax law permits such taxation, which, depending on the structuring scenario, does not necessarily seem to be the case under currently existing Polish tax law and regulations).

One could add more words on the newly introduced anti-abuse provision permitting the tax authorities of both Contracting States to deny treaty protection to what the Treaty calls - without defining it - "artificial arrangements" which brings to mind the 1998 Imperial Chemical Industries (C-264/96) and the 2006 Cadbury Schweppes (C-196/04) ECJ cases. However, even though this is quite an innovative...