Le magazine du trésorier - n°73 - 1er trimestre 2011 - (Page 4)

FINANCIAL HIGHLIGHTS Luxembourg News LUXEMBOURG INTRODUCING NEW TAX MEASURES Expatriate regime On 31 December 2010, the Luxembourg tax authorities issued a circular which introduces a beneficial income tax regime for expatriates. The provisions entered into force on 1 January 2011 and are applicable to assignments or recruitments made on or after this date. The aim of this tax regime is to attract highly qualified individuals to Luxembourg and to reduce the expenses incurred by companies who employ expatriates. The tax regime takes the form of a tax relief for certain costs linked to expatriation and is subject to a number of conditions. The tax regime applies to employees who are sent to work temporarily in Luxembourg on an assignment between intra-group entities. It also applies to employees who are directly recruited abroad by a Luxembourg company to work temporarily in Luxembourg. The relief is subject to a number of conditions. Provided that these conditions are met, various costs directly related to the expatriation would not be considered to be taxable employment income. The tax regime is applicable for the duration of the assignment. However, the duration cannot exceed the 31 December following the 5th anniversary of the employee’s arrival in Luxembourg. More information: http://www.ey.com/LU/en/Services/ Tax/Human-Capital Contact: John Hames, Jacqueline Guérinel, Sylvie Leick John.hames@lu.ey.com / Jacqueline.guerinel@lu.ey.com / Sylvie.leick@lu.ey.com Tax treatment of Companies carrying out intra-group financing activities The Luxembourg tax authorities issued on 28th January 2011 a circular (L.I.R. n° 164/2) which covers the tax treatment of companies carrying out intra-group financing activities in Luxembourg. The Circular is intended to provide guidance on the transfer pricing considerations applicable to intra-group financing transactions entered into by companies which predominantly perform intra-group financing activities. In essence, the Circular covers the following topics: Confirmation that the arm’s length principle included in the Luxembourg income tax law follows the arm’s length principle as defined by article 9 of the OECD Model Tax Convention on Income and Capital; The pricing of intra-group services should be determined based on a comparability analysis; Determination of the arm’s length remuneration of an intra-group service requires a functional and risk analysis; Documentation supporting the transfer prices applied on intragroup transactions; Binding clearance obtained by an intra-group financing company to the extent that it has sufficient substance in Luxembourg and that it is G G G G G G considered to effectively bears the risks related to the financing transactions for which clearance is sought; Duration of the clearance and renewal application should not exceed duration of 5 years; upon request extension for additional period of five years. More information: http://www.ey.com /LU/en/Services/Tax Contact: Marc Schmitz, Paul Leyder Marc.schmitz@lu.ey.com / paul.leyder@lu.ey.com Luxembourg modernizes accounting framework The law of 10th December 2010 is introducing International Financial Reporting Standards (“IFRS”) for undertakings in Luxembourg. One main goal of the new law is to grant undertakings a free option to prepare their statutory accounts and/or consolidated accounts in accordance with IFRS as adopted by the EU. However, undertakings may elect not to apply the provisions of the new law to those financial years which remain open at the date of entry into force of the new law. The new option is applicable for individual business persons, commercial companies, European economic interest groupings ("GEIE") end economic interest groupings ("GIE") with the exception of small individual business persons and small business in the form of partnerships (net turn over excluding VAT of the preceding year did not 4 http://www.ey.com/LU/en/Services/Tax/Human-Capital http://www.ey.com/LU/en/Services/Tax http://www.ey.com/LU/en/Services/Tax http://www.ey.com/LU/en/Services/Tax/Human-Capital

Table des matières de la publication Le magazine du trésorier - n°73 - 1er trimestre 2011

Surcouv
Couverture
Sommaire
EDITORIAL - Patching of IFRS 9, reason to worry?
FINANCIAL HIGHLIGHTS
INTERVIEW - Patrick Wallerand,
FOCUS
FORUM OF ADVERTISERS
CORPORATE FINANCE - 15 minutes with QlikTech
TREASURERS' ASSOCIATIONS
NEWS

Le magazine du trésorier - n°73 - 1er trimestre 2011