• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 3/12/2014

Luxembourg - How would new Savings Taxation Directive affect investments? 

March 12: If the EU Member States agree to update the Savings Taxation Directive, what changes would apply for investments in Luxembourg?

As reported in TaxNewsFlash-Europe, a new Savings Taxation Directive is being considered by the EU Member states. An update of the EU Savings Tax Directive requires unanimity.

In the past, Luxembourg and Austria have been reluctant to agree on the new proposal and have conditioned their approval of a new agreement as to whether third countries (e.g., Switzerland, Liechtenstein) would also apply the same measures.

Summary of proposals

The proposed Savings Taxation Directive measures include the following:

  • Certain non-UCITS investment funds (e.g. SICAV-Part II) and certain structured products that are currently out of scope of the Directive would be covered in the future.
  • Insurance contracts (unit linked insurance contracts) whose benefits are, to some extent, derived from debt claims would be included.
  • A look-through approach would apply for certain non-EU entities or legal arrangements (including trusts, transparent entities).
  • Investments held by individuals through certain EU intermediate structures (e.g., trusts) would qualify as “paying agents upon receipt” and thus fall into the scope of the updated Savings Taxation Directive.

Read a March 2014 report [PDF 163 KB] prepared by the KPMG member firm in Luxembourg: New Savings Directive next week?

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