Register of beneficial owners
The 4th EU AML Directive, as amended by the 5th EU AML Directive, requires each Member State of the EU inter alia to establish registers of beneficial owners (“RBO”) in respect of corporate and other legal entities incorporated within its territory.
By a Luxembourg law voted on last January 13th, 2019 (« RBO Law ») the registration of the beneficial owners is became a reality. As from March 1st, we entered into a six month transitional period at the end of which (i.e. end August 2019) all in-scope Luxembourg entities (e.g. commercial companies, special limited partnerships, investment funds, including common funds) will have to comply with the provisions of the RBO Law.
In particular, Luxembourg entities will be required to provide the RBO with relevant information on their ultimate beneficial owners of Luxembourg corporate and other legal entities (“UBOs”), as provided by the AML Law.
Failure by the entities and the relevant UBOs to comply with their respective obligations deriving from the RBO Law will be subject to criminal fines of up to EUR 1,250,000.
The UBO information to be recorded in the RBO is the following:
(i) name and first name;
(ii) date and place of birth;
(iii) nationality;
(iv) country of residence;
(v) private or professional address;
(vi) national identification number; and
(vii) nature and extent of the beneficial interest held.
Luxembourg budget law 2019 voted Corporate tax reduction, and revamp of tax unity regime
On April 25th, 2019 the Luxembourg Parliament voted to approve the 2019 Budget Law. What will be the important measures who will impact Companies as from January 1st, 2019 ?
A reduction of the corporate income tax (« CIT ») rate from 18% to 17%
A complete revamp of the legisltation governing the Luxembourg tax unity regime, to implement ATAD 1 interest limitation rules at Luxembourg group level
The extension of the reduced CIT rate of 15% for a taxable base of EUR 175 000,00 instead of EUR 25 000,00.
All UBOs are concerned, whether they are Luxembourg nationals or not.
As an exception, companies listed on certain regulated markets shall merely provide the RBO with the name of the relevant regulated market, instead of information on their UBOs.
Another important impact of the implementation of the RBO is the accessibility of the information : in principle, the UBO information will be accessible to:
national authorities, and ;
the general public (save for the data referred to under (v) and (vi)), unless a specific exemption is obtained.
Failure by the entities and the relevant UBOs to comply with their respective obligations deriving from the RBO Law will be subject to criminal fines of up to EUR 1,250,000.
VAT group regime
As per the Luxembourg law dated August 6th, 2018 in accordance with VAT directive the Value Added Tax group regime entered into force. Any closely Companies in financial, economic terms can form a VAT group.
What closely Companies means ?
Financial : direct or indirect link of control such as a participation in at least 20%.
Economic: The activity between
Companies have to be the same nature or be complement each other.
Organisational : Companies have to be directly or indirectly under joint management or under the control of a single person.
Conclusion
Since the entry into force of the new legislation, many businesses have shown an interest in implementing a VAT group in Luxembourg. Though we expected the regime to be primarily explored by companies active in the financial sector, the banks and operators in the financial industry have seemed hesitant to implement this regime. The main reason for this hesitancy seems to be that many of them are legally set up with a head office/branch structure and are, therefore, potentially impacted by the new legislation’s anti-abuse provision (based on the CJEU’s Skandia case). The retail sector, however, and businesses with a ‘full recovery’ profile have implemented VAT groups to benefit from the cash-flow impact of the regime and because of the benefits of the regime’s simplified VAT compliance obligations.
Fidelux Services at a glance
I am very proud to introduce you to Fidelux. As a newly incorporated company acting as chartered accountant in Luxembourg, Fidelux is specialized in accounting, tax, vat, legal, payroll, corporate services, liquidation. Fidelux can also act as statutory auditor and auditor to the liquidation. Fidelux is dedicated to group international companies, institutional, private client.
As shown in the below graph the Fidelux client portfolio is mainly composed of Soparfi but I have the ambition to make it progress in the next coming weeks and months…
Stay tuned for new information soon !
Do you want to know more ? Any questions or remarks ? Do not hesitate anymore….contact us !