End of the validity of tax rulings granted before January 1st, 2015

On October 14th, 2019, Mr. Pierre Gramegna, Minister of Finance, submitted to the Luxembourg Parliament bill of law 7500 related to the state’s budget for the year 2020 (hereafter “Bill”).

Among the various measures proposed by this Bill, Article 5 amending the general tax law of May 22nd, 1931 as amended (hereafter the “Tax Law”) provides for the insertion in the latter of a paragraph 29b limiting the period of validity of tax rulings granted before January 1st, 2015 (hereafter “Article 5”).

This provision follows the amendment of December 19th, 2014 of the Tax Law, which entered into force on January 1st, 2015 and inserted a paragraph 29a limiting the validity of tax rulings granted as from January 1st, 2015 for a period not exceeding 5 tax years.

Indeed, this Article 5 has been included in Bill in order to guarantee legal consistency between the procedures related to the issuance of tax rulings granted before January 1st, 2015 and those granted after January 1st, 2015 which have a validity period of 5 years.

In this context, taxpayers who have obtained a tax ruling before January 1st, 2015 will be able to invoke this ruling one last time as part of their tax return for the 2019 tax year, provided that the tax ruling complies with the legislation in force. These tax rulings will then automatically lapse at the end of the 2019 taxation year and it will therefore no longer be possible to refer to them for subsequent taxation years. Nevertheless, it will still be possible for the taxpayers concerned to submit a new request for a new tax ruling in accordance with the procedure in force as provided for in paragraph 29a of the Tax Law, as amended.