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Luxembourg Supports EU Tax Ruling Reforms

by Ulrika Lomas,, Brussels

23 December 2014

The Luxembourg Government is to provide the European Commission with a list of the tax rulings issued by its tax authorities, along with a list of the beneficiaries of its concessionary tax regime for intellectual property (IP) income.

Luxembourg Prime Minister Xavier Bettel announced that the decision had been made in light of the Commission's intention to review the tax ruling practices of all European Union (EU) member states, and in view of the proposed European Directive on the mandatory automatic exchange of information on tax rulings.

Bettel said, "The vast majority of EU member states issue tax rulings. Luxembourg is strongly in favor of the creation of a level playing field with regard to international taxation and tax rulings." He added that the Government's decision is "a clear illustration of Luxembourg's commitment to finding common solutions on a European level."

The European Commission revealed on December 17 that it is to ask all member states whether they offer tax rulings. If so, they will be asked to provide information on their tax ruling practices and a list of all companies that have received a ruling between 2010 and 2013. The Commission already requested this information from Cyprus, Ireland, Luxembourg, Malta, the Netherlands, and the UK in June 2013. It also previously asked for information on so-called patent box regimes (which offer lower tax rates on IP income) from Belgium, Cyprus, France, Hungary, Luxembourg, Malta, the Netherlands, Portugal, Spain, and the UK.

The new European Competition Commissioner, Margrethe Vestager, said: "I welcome that by today's announcement Luxembourg acknowledges the Commission's powers to investigate their general tax rulings practice under State aid rules. I understand that the Luxembourg authorities have also decided to withdraw their actions against the Commission's information requests before the European courts."

"I hope and have every reason to assume that going forward my team and I will see good cooperation by the Luxembourg authorities and all other member states in our efforts to tackle unfair tax avoidance."

TAGS: tax | European Commission | Belgium | Hungary | Ireland | Malta | Netherlands | Portugal | property tax | tax avoidance | revenue guidance | intellectual property | Luxembourg | United Kingdom | ministry of finance | tax authority | tax planning | transfer pricing | tax rates | Cyprus | France | Spain | revenue statistics | European Union (EU) | Europe

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