“A SARL” claimed application of the preferential tax regime in Luxembourg under Article 50bis LIR for trademark royalties under a licence that nominally set remuneration at 5 percent of the Belgian affiliate’s turnover, yet the amount invoiced for 2015 was a lump sum that did not match 5 percent of that turnover.
The Tribunal noted that “A SARL”‘s service income booked in 2013 and 2014 dropped in 2015 while a similar amount appeared as “royalties,” that the company’s website presented “B” management software delivered under licence with hosting and cloud services subcontracted to C SAS, and that Article 3 of the licence computed royalties retroactively from 1 January 2015 even though the mark was registered only on 2 October 2015. It concluded the payments were in substance for services or software licences, not for use of the “A” trademark, that royalties are typically periodic rather than a one-off lump sum, and that the arrangement constituted an abuse of rights. Article 50bis relief was denied.
An appeal was then filed by A SARL with the Administrative Court.
Judgment
The Administrative Court dismissed “A SARL”’s appeal as inadmissible on procedual grounds, leaving the Tribunal’s decision intact without addressing the merits.
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