18 October 2016 Luxembourg introduces draft budget law 2017 including new article on arm's length principle in line with Actions 8-10 of OECD BEPS Action Plan The Luxembourg Government introduced in Parliament on October 12, draft n°7050 on the budget for the year 2017 (the Budget Law). This document again reflects the willingness of the Government to fully comply with current international developments, particularly with respect to the Organisation for Economic Co-operation and Development's (OECD's) Base Erosion and Profit Shifting (BEPS) Action Plan and related European Union (EU) developments. The Budget Law foresees the introduction of a new article 56bis in the Luxembourg Income Tax law (ITL) that aims to clarify the concept of the arm's length principle. This new article contains the basic elements to be respected in the framework of a transfer pricing analysis based on the principles as revised in the context of BEPS. This new article particularly focuses on the comparability analysis and contains new elements to be considered, transposing the conclusions from Actions 8-10 of the BEPS Plan into domestic law. A Tax Alert prepared by EY's Global Tax Desk Network, and attached below, provides additional details. Document ID: 2016-1768 |
