Subscription tax exemption for Microfinance Investment Funds
On 14 July 2010 Luxembourg introduced a Grand Ducal decree (published in the Mem A 127 of 30 July 2010) for a conditional Luxembourg subscription tax exemption for Microfinance Investment Funds. The authorities thereby hope to make Luxembourg the most attractive financial centre for a transparent and responsible Microfinance industry.
In this context, are exempt from Luxembourg subscription tax, undertakings for collective investment (UCI), specialized investment funds (SIF), individual compartments of UCIs with multiple compartments and individual compartments of SIFs with multiple compartments, where:
- their investment policy prescribes that at least 50% of their assets be invested in one or more Microfinance institutions; or
- they hold a Microfinance label issued by the "a.s.b.l. Luxembourg Fund Labelling Agency".
In this regard, are considered Microfinance institutions, the aforementioned UCIs and SIFs as well as financial institutions whose assets are at least for 50% constituted by investments in Microfinance.
The concept of Microfinance should be understood as any financial operation other than Consumer loans:
- whose objective is to assist poor populations excluded from the traditional financial system through financing small revenue-generating activities; and
- whose value does not exceed € 5'000.
This Decree is applicable as from fiscal year 2010.
Electronic cross-border VAT refund procedure for VAT taxable persons established in Luxembourg - updated deadline
As mentioned in our previous Luxembourg Tax News - Issue 2010-09 of 2 July 2010, the European Directive 2008/9/EC (or "new 8th Directive") came into force on 1 January 2010 modifying the former paper-based VAT refund procedure on business expenses incurred by taxable persons in a Member State in which they are not established, and introducing a new electronic procedure intended to be more efficient.
This new procedure establishes an electronic system by which the taxable person submits his application for a refund via a web portal developed by the Member State in which he is established.
However, some Member States faced delays in launching their web portals, others had a number of technical problems in their set up and running.
Consequently, the European Commission adopted on 15 July 2010 a proposal to postpone the deadline for the submission of VAT refund requests related to the year 2009 from September 2010 to March 2011.
The Luxembourg VAT authorities' portal (www.aed.public.lu/vatrefund/) has been adapted accordingly. Hence, Luxembourg businesses willing to recover VAT incurred in other Member States in 2009 should submit their claims by 31 March 2011 (instead of 30 September 2010) at the latest.
Our Luxembourg VAT department remains at your disposal for any further information you may require.
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.