News & Events

Luxembourg - Additional information regarding the minimum advance corporate income tax (ACIT)

Submitted by Firm:
Arendt & Medernach
Firm Contacts:
Louis Berns, Louisa Silcox, Philippe Schmit
Article Type:
Legal Update
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As mentioned in our newsflash of last week, in order to support the 2013 budget, an ACIT is also introduced as from 1 January 2013 for all companies whose financial assets, transferable securities and cash deposits do not exceed 90% of their total balance sheet. The minimum ACIT due by such companies, varying from EUR 500 to EUR 20,000, depends on the closing balance sheet total of the company (lower than EUR 350,000 to higher than EUR 20,000,000). 

In this respect, the Luxembourg tax authorities have announced today that for the purposes of the minimum ACIT, the net value of assets which generate (or may generate) income that Luxembourg is not allowed to tax according to a double taxation treaty (e.g. income deriving from foreign real estate) must be excluded when computing the balance sheet total. This means that a Luxembourg company which only holds real estate assets located in a treaty country should in general only pay an ACIT of EUR 500.