";s:4:"text";s:4165:" as from year N+5), the NWT reserve of year N is released and can be either distributed to the shareholders or used to constitute a new NWT reserve.Investment funds are subject to subscription tax (at various rates) on their total net assets valued at the last day of each quarter.
0000001607 00000 n Depreciation rates must be consistent with economic reality. It has been replaced by a minimum net wealth tax (see Net wealth tax [NWT] in the Other taxes section).
Consequently, all figures to be used are those as shown in the commercial balance sheet, subject only to any specific revaluations necessary to apply CIT provisions.In particular, shareholdings that qualify for the participation exemption and Luxembourg-situs real estate must both be included in gross assets for these purposes. A 7% solidarity surtax is imposed on the CIT amount. Applicable rates are based on the nature and on the quantity of the products.In addition to VAT, some products are subject to specific excise duties. The hybrid mismatches measures of ATAD 2, covering a wider range of intra-EU mismatches, but also mismatches with third countries, will be included in a subsequent law expected in the course of 2019, and having effect from 1 January 2020.A ‘hybrid mismatch’ is defined as arising when differences in the legal characterisation of a financial instrument or entity in an arrangement structured between the taxpayer and a party in another member state, or when the commercial or financial relations between a taxpayer and a party in another member state, give rise to the following consequences:The elimination of the tax advantage arising from a hybrid mismatch, as defined above, is to be effected as follows:Provisions for bad debts are generally tax deductible.Gifts for scientific, charitable, or public purposes to institutions of general interest are deductible, subject to a maximum of 20% of the net income or up to an amount of EUR 1 million (the minimum being EUR 120), with a possibility to spread the deduction over two years in case of excess.Expenses connected to the business activity of a taxpayer are, in principle, tax deductible.