25 September 2018 European Commission holds that Luxembourg exemption for US branch profits does not constitute State aid The European Commission (the Commission) on September 19, announced that the Luxembourg corporate tax exemption of profits attributable to a United States (US) branch did not lead to illegal State aid, as it is in line with national tax laws and the Luxembourg-United States Double Taxation Treaty. This concludes the investigation started in December 2015 into two Luxembourg rulings of a multinational company (MNC) involving a Luxembourg company with US and Swiss branches. The Commission's decision is the first in the recent investigations into fiscal State aid that resulted in the Commission confirming that there is no State aid. It confirms that exemptions granted by properly applying the provisions of tax treaties do not constitute illegal State aid even if this results in double non-taxation and is therefore relevant for all Luxembourg (and European Union (EU)) companies that benefit from an exemption under a tax treaty. Document ID: 2018-1883 |
