Trésorier/Treasurer magazine - N°86 - Jul/Aug/Sep 2014 - (Page 6)

Lux News LE MAGAZINE DU TRESORIER / TREASURER MAGAZINE - N°86 - JUL / AUG / SEP 2014 Luxembourg Tax News 6 European Commission takes Luxembourg to Court over VAT on independent groups of persons In January 2012, the European Commission officially asked Luxembourg through a reasoned opinion to change its rules on VAT in the case of independent groups of persons («IGP»). The current rules provide an exemption for services rendered to the members of an IGP provided that the members' taxable turnover does not exceed 30% of their annual turnover (or 45% under certain conditions). Group members are also allowed to deduct the VAT charged to the group on its purchases of goods and services and operations by a member in his or her own name but on behalf of the group are regarded as nontaxable. Those three characteristics made the Commission consider the IGP regime incompatible with European Union law. In August 2012 the law has been changed. It is now required that the services of the IGP could not be used mainly for activities subject to VAT and that are not VAT exempt (Grand-Ducal Decree of 7 August 2012). However, these changes have been judged insufficient to bring Luxembourg law in compliance with the EU VAT rules and consequently the European Commission has decided to take Luxembourg to the Court of Justice of the European Union (Press Release of 20 February 2014, IP/14/161). Michel Lambion, Indirect Tax Partner, EY Luxembourg Yannick Zeippen, Indirect Tax Partner, EY Luxembourg DIRECT TAX Laws voted: The following laws have been voted recently by the Luxembourg Parliament: * Draft law (6616) on transposition of Merger Directive 2009/133/CE and Parent-Subsidiary Directive 2011/96/UE: the aim of the law is to replace the reference to the old Directives in various articles of the Income Tax Law (22bis, 59bis, 147, etc.) with the reference to the new Directives. In addition, Croatian companies are added to the list of companies benefitting from the participation exemption. * Draft law (6632) on automatic exchange of information: the law transposes into Luxembourg law article 8 of the Council Directive 2011/16/EU dated 15 February 2011 on administrative cooperation in the field of taxation. It introduces the automatic and mandatory exchange of information for 3 specific categories of income, being namely employment income, pension income and directors' fees. * Budget law 2014 (6666): on 24 April, the Parliament voted the 2014 Budget law. The costs for 2014 should be reduced by approximately 230 million euros and revenues increased by 100 million euros, leading hence to a global surplus of approximately 100,3 million euros. The revenue increase derives from an increase of tax revenues (direct taxes, VAT and subscription tax) without however any tax rates being raised. * Draft law (6648) approving the Convention on Mutual Administrative Assistance in Tax Matters * Draft law (6642) on the place of supply of services: amongst other provisions, the law modifies the rules applicable for determining the place of supply of telecommunication services, broadcasting transmission services and electronically supplied services to nontaxable persons. These services, currently taxable at the place of establishment of the service provider, will be taxable, as from 1 January 2015, at the place of establishment of the non-taxable customer or at the place of his domicile or usual place of residence. Update on double tax treaties The double taxation treaty concluded with Laos and with Sri Lanka entered into force on 21 March 2014, respectively on 11 April 2014. Furthermore, the Governments of the Republic of Mauritius and the Grand Duchy of Luxembourg signed a Protocol amending the current double taxation treaty between the two countries.

Table des matières de la publication Trésorier/Treasurer magazine - N°86 - Jul/Aug/Sep 2014

Couverture
SOMMAIRE
EDITORIAL
FINANCIAL HIGHLIGHTS Luxembourg Tax News
INTERVIEW David Holland
FOCUS
FORUM
CORPORATE FINANCE
15 MINUTES WITH INTIX
THE FINANCIAL RISK OBSERVATORY
NEWS

Trésorier/Treasurer magazine - N°86 - Jul/Aug/Sep 2014