Luxembourg vs “Lux SARL”, September 2022, Administrative Tribunal, Case No 44902

« | »

In 2016 “Lux SARL” had – via the immediate parent company – been granted funds by a related company on Cayman Islands, in the form of a profit participating loan.

In 2018, after looking into the arrangement, the tax authorities informed “Lux SARL” that it intended to adjust its tax return for the year 2016 insofar as it “(…) does not accept the deduction of notional interest in relation to a capital gain realised on the sale of securities, and after dismissing an objection by Lux SARL, a final assessment was issued in 2019”.

Lux SARL then filed an appeal with the Administrative Tribunal.

Judgement of the Administrative Tribunal

The Tribunal found the appeal of Lux SARL unjustified and upheld the decision of the tax administration.

The Tribunal agreed with the approach taken by the tax authorities disregarding the classification of the financing received and denying deductions of a notional interest. According to the Tribunal, the choice of financing was “made solely for tax purposes”.

Click here for English translation

Click here for other translation

Luxembourg 230922 Case No 44902

Related Guidelines

Leave a Reply

Your email address will not be published. Required fields are marked *