Trésorier/Treasurer magazine - N°88 - Jan/Fev/Mar 2015 - (Page 6)

Lux News Luxembourg Tax News LE MAGAZINE DU TRESORIER / TREASURER MAGAZINE - N°88 - JAN / FEB / MAR 2015 INDIRECT TAX VAT regime in Free Trade Zone 6 DIRECT TAX Budget Package 2015 In relation with the Free Trade Zone regime, Luxembourg will change its VAT law to extend the special regime for work of arts, second hand goods and collector's items and antiques to organizers of public auction. It will also extend the application of the reduced VAT rate (8% as from 1st January 2015) to some transactions, including importation, of collector's items and antiques while this rate is currently available only for work of arts. These changes will enter in force on 1st January 2015. On 15 October 2015, Luxembourg's Minister of Finance, M. Pierre Gramegna, presented the "Budget of a new generation". The Luxembourg Parliament will not only have to vote on the Budget Law 2015, but also on a multi-annual financial programming covering the period 20142018 and a draft law on the implementation of the first part of this "Package for the Future". The 258 measures of the Package for the Future aim at saving more than 1 billion euros in 2018 and thus to rebalance the public finances by that date. Michel Lambion, Indirect Tax Partner, EY Luxembourg Yannick Zeippen, Indirect Tax Partner, EY Luxembourg Jacques Verschaffel, Executive Director, EY Luxembourg As already announced earlier this year, the current VAT rates will be increased by 2 points, except as regards the so-called super-reduced rate of 3%. As from 1 January 2015, VAT will thus apply at a rate of 17%, 14%, 8% or 3%. The super-reduced rate of 3% will thus continue to apply as in the past, except for the delivery of alcoholic beverages in catering services and the acquisition of dwellings intended for rental. The VAT rate applicable to dwellings intended for rental will thus raise from currently 3% to 17% whereas renovation work of rented dwellings will continue to benefit from the 3% VAT rate. Furthermore, a transition period is proposed, since the super-reduced rate will be applied until 31 December 2016 for construction projects (intended for renting) for which the authorisation request has been filed before 1 January 2015. The minimum corporate income tax regime is adapted in order to take into account the more specific situation of small and medium-sized enterprises. Going forward, the EUR 3,000 minimum corporate income tax for entities exercising mainly a financing activity will no longer be applicable to entities whose sum of qualifying financial assets does not exceed EUR 350,000. If this ceiling is not achieved, the minimum corporate tax of EUR 500 applies instead of EUR 3,000. Furthermore, a 'contribution for the future of our children' is introduced. This contribution will be levied at a rate of 0.5% on each category of income received by individuals, without minimum or ceiling as regards the assessment basis, but after deduction of an allowance corresponding to 25% of the minimum social salary. Additionally, it is foreseen to incorporate into the General Tax Law ("Abgabenordnung") a provision dedicated to the tax ruling practice ("procedure des décisions anticipées"). Upon a written and motivated request, the officer of the tax competent taxation office will deliver an advance decision relating to the application of Luxembourg tax law to one or more transactions envisaged by a taxpayer. This decision will be binding on the tax office when issuing future tax assessments. The detailed procedure will be laid down in a grand-ducal regulation to be issued at a later stage. These provisions reflect and formalise the existing administrative practice, enabling taxpayers to obtain adequate upfront legal certainty. It should also ensure a harmonized and uniformed application of the tax laws across the various taxation offices and an increased transparency towards foreign tax authorities. In this context, and since it involves an increased administrative and functional burden, the direct tax authorities will be authorized to levy a specific duty of up to EUR 10,000 per request, payable by the requesting individual or entity. Given the globalization of transactions and consequently the increased focus on transfer pricing matters, the Luxembourg government has also decided to forge a more

Table des matières de la publication Trésorier/Treasurer magazine - N°88 - Jan/Fev/Mar 2015

Table of contents
INTERVIEW From Legal Entity Management to Bank Account Management - LVMH case study
Treasurers, do you have any BEPS?
7 Ways to impress your CFO boss starting now
How to do more with less
Repo made easy
Comment combiner rendement, liquidité et gestion des risques pour sa trésorerie : l'exemple français
Les stratégies d'Alpha, à la rescousse d'un environnement de taux faibles
The benefits of collateral for the corporate treasurer
Les états financiers dans le cadre d'EMIR - que réserve l'avenir?
VAT changes as from 2015: new reimbursement procedure of VAT credit
Investissement des entreprises - une nouvelle ère pour la trésorerie
15 MINUTES AVEC USG Finance Professionals

Trésorier/Treasurer magazine - N°88 - Jan/Fev/Mar 2015