New double tax treaty with Luxembourg

A revised double tax treaty has been signed with Luxembourg reflecting the current version of the OECD model.

Distributions from Luxembourg investment company (SICAV) exe ...

Corporations with at least a 25% share in a Société d'investissement à capital variable (SICAV), a Luxembourg investment company, do not have to pay income tax in Germany on the dividends received from the SICAV in 2010. This also applies if the Luxembourg tax authorities – for whatever reason - did not exercise their right of taxation at source and the distributions hence remained untaxed.

Agreement with Luxembourg on redundancy payments

The finance ministry has agreed with Luxembourg that redundancy payments and unemployment benefit shall be taxed in the country of the (former) employment.

EU state aid : Dispute over tax advantages for Luxembourg co ...

On 21 July 2021 Luxembourg has filed an appeal against the judgment of the General Court of 12 May 2021 in the joined cases T-516/18 and T-525/18 (Luxembourg and Engie Global LNG Holding and Others / Commission) regarding certain tax rulings concerning the transfer of business activities within the Engie group.

Tax on wages from Luxembourg for time spent in Germany suspe ...

The finance ministry has decreed a suspension of 2010 tax assessments on commuters to Luxembourg in respect of time spent in Germany whilst sick, on holiday or training.

Agreement with Luxembourg on commuters

Germany and Luxembourg have agreed to waive the split of remuneration of commuters, if less than 20 working days in the year were not spent in the country of employment and that country taxes the full amount.

Equal split of transport crew earnings in Germany and Luxemb ...

The finance ministry has agreed with Luxembourg that road vehicle and train crews resident in the one country but working for an employer in the other shall tax their earnings in the country where they actually drive. If they drive in both countries on the same day the day’s earnings are split equally between the two.

No reduced rate of VAT on e-books

The ECJ has held that there is no provision in the VAT Directive allowing France and Luxembourg to tax supplies of e-books at other than the standard rate of VAT.

Dividend exemption under double tax treaty or abuse of legal ...

The distribution of profits by a Luxembourg subsidiary (in the legal form of a SARL) to its German parent company (a partnership limited by shares – KGaA) may be an abuse of legal forms where the KGaA provided SARL with a loan and shortly thereafter waived repayment, thereby putting SARL in a position to actually make the profit distribution. Even more when the losses arising from the impairment of the value of SARL because of the distribution are to be used by the shareholders in a tax-effective manner.

Finance ministry rejects bond stripping scheme

The finance ministry has published a decree asking tax offices to reject brokered bond stripping schemes between German and Luxembourg investment funds abusing the treaty protection of dividends.

Related party by ownership despite restrictions on exercise ...

The Supreme Tax Court has held that internal or other restrictions on the excise of ownership rights do not obviate an association by common shareholding of more than 25%. It has also held that the application of the transfer pricing documentation rules to cross-border transactions only is, while discriminatory, justified by the need to protect tax revenue.

Contractual agreement cannot limit a taxpayer’s duty to supp ...

The Supreme Tax Court has held that the duty of a taxpayer to supply information on the affairs of others is a public duty that cannot be restricted by a contractual agreement with the owner of the information concerned.

Pre-2008 disallowance of related-party loan interest

The Supreme Tax Court has held that the pre-2008 disallowance of loan interest on related-party finance for the purchase of shares refers to direct investments only.

Bank officer not liable for probable evasion by customers

The Supreme Tax Court has upheld a lower court ruling absolving a bank officer from liability for his complicity in supporting the probable evasion of tax on interest income by customers.

European Council agrees on automatic information exchange on ...

Royalty withholding tax on net income of EU creditor

The ECJ has held that the withholding tax on a royalty paid to a corporation in another EU country may not be more than the corporation tax rate applied to the income less the directly related costs.

No deduction for private currency speculation losses before ...

The Supreme Tax Court has refused a taxpayer a deduction for a series of short-term losses incurred through speculating in foreign currencies.

Tax & Legal News - Issue 2, June 2012

In this issue: Pwc Reports, Official Pronouncements, Supreme Tax Court Cases, From Europe and From PwC

Fire insurance policy reinsured with group captive not an ab ...

The Supreme Tax Court has accepted as legitimate an arrangement under which an independent insurance company offers a group subsidiary cover against a 100% reinsurance with a group captive.

ECJ provides guidance on beneficial ownership and abuse of r ...

On 26 February 2019, the ECJ issued its judgements in the joined cases T Denmark and Y Denmark -v- the Danish Ministry of Taxation (C-116/16 and C-117/16) and N Luxembourg 1, X Denamrk A/S, C Danmark I and Z Denmark ApS -v- the Danish Ministry of Taxation ( C115/16. C-118/16, C-119/16 and C-299/16).