On December 8th 2017, the Luxembourg tax authorities issued the new circular L.G.-A. No. 61 (replacing the previous Circular dated February 12th 2015, please see our previous newsletter dated March 2nd 2015) which aims to cover the procedure applicable to the request of tax residency certificates for collective investment funds (hereafter the “Circular”).
The most important change is the inclusion of Reserved Alternative Investment Funds (hereafter “RAIF”), for which a specific procedure has been put in place.
The procedure varies depending on whether a tax residency certificate is requested in the context of a specific double tax treaty or whether a domestic tax residency certificate is requested (residency solely according to domestic law).
In the first case, the applicant (the RAIF itself or the appointed depository) needs to provide the tax number, the date of incorporation and the address of the RAIF (taking into account that the tax authorities might request any additional information they deem necessary to issue the certificate, such as the confirmation that the subscription tax owed by the RAIF has been paid).
In the second case, the following additional information is required:
- Details of the reason why the domestic tax certificate is requested, including express reference to the foreign tax/legal provision that requires such a tax residency certificate;
- Detailed listing of the income earned by the RAIF and for which the certificate is requested (this can be provided at a later stage if the income has not yet been received).
RAIFs that have opted to fall within the provisions of article 48 of the RAIF Law dated July 23rd 2016 (and thus benefit from a treatment similar to a SICAR) are excluded from the scope of the Circular as they are fully taxable companies and thus subject to the standard procedure applicable to all fully taxable companies.
Lastly, the scope of double tax treaties covered by the Circular has been extended in order to cover amended as well as new double tax treaties entered into by Luxembourg recently (i.e. the double tax treaties with Andorra, Brunei, Croatia, Estonia, Serbia, the Seychelles, Singapore, Ukraine and Uruguay). All of the above mentioned double tax treaties, save for the one entered into with Ukraine, include a positive provision treating investment funds incorporated under the form of companies as “residents” under the double tax treaty.