On 30 October 2026, the Luxembourg Administration des Contributions Directes (ACD) published three administrative circulars providing detailed guidance on the application of Articles 152ter, 154quater, and 154quinquies of the Income Tax Law (L.I.R.). These articles govern specific regimes such as the tax treatment of certain capital gains, exemptions for qualifying holding structures, and anti-avoidance provisions related to hybrid mismatches. The circulars aim to clarify interpretative uncertainties and ensure consistent application by tax officers and taxpayers alike.
Key Takeaways
- Article 152ter L.I.R.: Clarifies conditions for the exemption of capital gains on substantial participations, including the definition of “qualifying subsidiary” and the required holding period.
- Article 154quater L.I.R.: Provides guidance on the neutralization of hybrid mismatches in cross-border structures, aligning with EU ATAD2 and OECD BEPS Action 2 recommendations.
- Article 154quinquies L.I.R.: Details the application of the general anti-abuse rule (GAAR) for arrangements lacking commercial substance, with practical examples for taxpayer reference.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement