- Headlines on the « draft laws »
- Headlines « Economy and finance »
- Recent legislation
- Miscellaneous
* Revised version of the Ten Principles of Corporate Governance of the Luxembourg Stock Exchange (www.bourse.lu - 01/10/2009)
* Tax losses carry forward and identity of the taxpayer (decision of the Luxembourg Administrative Tribunal no. 23982, dated July 6, 2009) (www.ja.etat.lu – 06/07/2009)
*Cross-border mergers (www.legilux.lu – 10/06/2009)
- Headlines on the « draft laws »
Draft law on the approval of the Agreements between the Belgian-Luxembourgish Economic Union and some third countries concerning the promotion and the reciprocal protection of investments.
Draft law containing approval
(i) of the conventions on the avoidance of double taxation between:
1. the Grand Duchy of Luxembourg and the Kingdom of Bahreïn;
2. the Grand Duchy of Luxembourg and the Republic of Armenia;
3. the Grand Duchy of Luxembourg and the State of Qatar;
4. the Grand Duchy of Luxembourg and the Principality of Monaco;
5. the Grand Duchy of Luxembourg and the Principality of Liechtenstein;
(ii) of the Protocols, the Additional Acts and the exchanges of letters between:
6. the Grand Duchy of Luxembourg and the United States of America;
7. the Grand Duchy of Luxembourg and the Kingdom of the Netherlands;
8. the Grand Duchy of Luxembourg and France;
9. the Grand Duchy of Luxembourg and the Kingdom of Denmark;
10.the Grand Duchy of Luxembourg and Finland;
11.the Grand Duchy of Luxembourg and the United Kingdom;
12. the Grand Duchy of Luxembourg and the Austrian Republic;
13. the Grand Duchy of Luxembourg and the Kingdom of Norway;
14. the Grand Duchy of Luxembourg and the Kingdom of Belgium;
15. the Grand Duchy of Luxembourg and the Swiss Confederation;
16. the Grand Duchy of Luxembourg and the Republic of Iceland;
17. the Grand Duchy of Luxembourg and the Republic of Turkey.
Extension of the draft law to the Protocol and the exchange of letters between:
18. the Grand Duchy of Luxembourg and the United Mexican States;
19. the Grand Duchy of Luxembourg and the Kingdom of Spain;
20. the Grand Duchy of Luxembourg and the Federal Republic of Germany.
- Headlines « Economy and finance »
Amendment to the convention on the avoidance of the double taxation between Luxembourg and Germany
On December 11, 2009 the Luxembourgish Minister of Finance, Mr. Luc Frieden, and the German Minister of Finance, Mr. Wolfgang Schäuble, signed an amendment to the convention on the avoidance of the double taxation between Luxembourg and Germany, to the purpose of including the exchange of information upon request in the specific cases provided by the OECD standard.
The Luxembourgish Minister of Finance announced that the text will be soon presented to the Parliament and hoped for the text to be ratified within March 2010, together with the other conventions on the avoidance of double taxation that Luxembourg recently signed.
Source: www.gouvernement.lu- Recent legislation
Mémorial A n°228 / 2009
Law dated November 28, 2009 containing approval of the Convention between the Government of the Grand Duchy of Luxembourg and the Government of Georgia aimed at avoiding double taxation and preventing tax frauds on income and property tax and of its Protocol.
Mémorial A n°229 / 2009
Law dated November 28, 2009 containing approval of the Convention between the Government of the Grand Duchy of Luxembourg and the Government of the Republic of Moldavia aimed at avoiding double taxation and preventing tax frauds on income and property tax and of its Protocol.Read more
- Revised version of the Ten Principles of Corporate Governance of the Luxembourg Stock Exchange (www.bourse.lu - 01/10/2009)
The Ten Principles of Corporate Governance of the Luxembourg Stock Exchange were issued in a revised version, which entered into force on October 1, 2009.
The new version maintains the initial structure consisting of ten principles and based on three levels of rules: principles («principes»), recommendations («recommandations») and guidelines («lignes de conduite»).- Tax losses carry forward and identity of the taxpayer (decision of the Luxembourg Administrative Tribunal no. 23982, dated July 6, 2009) (www.ja.etat.lu – 06/07/2009)
According to article 114, paragraph 2, number 3 of the Luxembourgish law on income tax, which provides that the right to deduct tax losses pertains to the taxpayer that incurred them only, there must be identity between the company that incurred the losses and the one that carries forward them.
According to the interpretation of the tax authorities, the right to deduct tax losses is subject to the condition that the taxpayers maintains its identity under a legal and economic point of view, so that a material change in the company’s shareholding, along with a change of the company’s activity in the period between the date in which the losses were incurred and the one in which they are deducted, determines the extinguishment of the right to deduction, as a consequence of the taxpayer’s losing its identity.
In its decision no. 23982, dated July 6, 2009, the Administrative Tribunal challenged the above interpretation and laid down the principle according to which the legal criterion is the only one that must be taken into consideration in evaluating the identity of the taxpayer («the right to carry forward the losses of the company is subject to the quality of company according to the company law only; the law does not make reference to other criteria, such as the identity of the shareholders or the activities of the company»).
On August 6, 2009 the tax authorities appealed the decision of the Administrative Tribunal before the Administrative Court of Appeal, which now has the task to fix the position of the Luxembourgish case-law on this issue.- Cross-border mergers (www.legilux.lu – 10/06/2009)
The law dated June 10, 2009 concerning cross-border mergers of limited liability companies, the simplification of the formation procedure of joint stock companies as well as the manintenance and alteration of their capital (Mémorial A no. 151/2009) amended the law dated August 10, 1915 on commercial companies (as amended) (hereinafter, «LSC») on the following issues:
1. Reform of the regime of cross-border mergers (amendments to articles 257 and the following of LSC).
2. Exemption from the independent expert’s report on the contributions to the share capital of a joint stock company in case the consideration is other than in cash (new paragraphs from 3-bis to 3-quinquies were included in article 26-1 LSC).
3. Repurchase of the joint stock company’s own shares: the duration of the authorization of the shareholders’ meeting was extended from 18 months to 5 years. The new law also removed the limitation of the repurchase to 10% of the subscribed share capital in case the repurchase is decided by the shareholders’ meeting on other grounds than the ones that are provided by the law expressis verbis [amendments to article 49-2 (1) LSC)].
4. Implementation of a regime on the advance of funds, the granting of loans or the issuing of guarantees with a view to the acquisition of the shares of a joint stock company from a third party [the new law amended article 49-6 (1) LSC and introduced a new article 49-6bis LSC)].