Luxembourg, 1330 Luxembourg
Over the last decades, Luxembourg has developed and cemented its position as a prime holding location and a major financial centre within Europe. Multinational enterprises and international investors alike use Luxembourg as a platform to manage their business activities and investments.
Luxembourg companies may enter into diverse commercial and financial transactions with associated enterprises. The prices charged in regard to these controlled transactions are called transfer prices. For Luxembourg tax purposes, these prices have to adhere to the “arm’s length principle”.
The arm’s length principle is the international transfer pricing standard that OECD member countries have agreed should be used for tax purposes by MNE groups and tax administrations. The arm`s length principle requires that the consideration for any transaction between related parties conform to the level that would have been agreed if the transaction were to have taken place between unrelated parties under comparable circumstances.
The arm’s length principle is firmly ingrained in Luxembourg tax law and has been explicitly stated in article 56 of the Luxembourg Income Tax Law (LITL). In addition, several concepts and provisions under Luxembourg tax law require the arm’s length standard to be respected by Luxembourg companies.
Over the last years, transfer pricing has become the hot topic in Luxembourg taxation in an environment that relies increasingly less on tax rulings. In the past, tax rulings were viewed as a way to provide certainty and to avoid risks when implementing investments or intra-group transactions. However, for a number of reasons this is no longer the case and transfer pricing documentation is more and more filling the gap as a tax risk management tool.
As a member of the OECD, Luxembourg adheres to the organization’s Transfer Pricing Guidelines which reflect the consensus of OECD Member countries towards the application of the arm’s length principle as provided in article 9(1) of the OECD Model Tax Convention.
Transfer pricing and the OECD Transfer Pricing Guidelines received a lot of attention during the OECD/G20 in their Base Erosion and Profit Shifting (BEPS) initiative. 4 of the 15 BEPS Actions aimed at providing new or changing existing transfer pricing guidance and related documentation requirements. As a result thereof, several chapters of the OECD Guidelines have been significantly amended or replaced in the 2017 Revision thereof.
Objectives of the workshop
Upon successful completion of this workshop, the participants will:
- have an overview of the Luxembourg transfer pricing environment
- have an overview of the OECD Transfer Pricing Guidelines and the new guidance introduced as part of the OECD BEPS Project
- have a better understanding on Luxembourg transfer pricing rules and practices including the new Circular on the transfer pricing treatment of financing activities (Circular L.I.R. 56/1 and 56bis/1 released on December 27, 2016)
- have an overview of the functional and economic analysis in transfer pricing reports
- understand the impact of transfer pricing rules on the tax positions of Luxembourg companies
- understand the importance of transfer pricing documentation in a company’s risk management strategy
- Introduction to transfer pricing
- The arm’s length principle
- The OECD Transfer Pricing Guidelines
- Luxembourg transfer pricing rules
- Typical controlled transactions in Luxembourg
- Interest rates
- Financing activity
- Intra-group services
- Fund management services
- Financing activities
- Scope of the Transfer Pricing Circular
- Substance requirements
- Determining an arm’s length remuneration
- Transfer pricing analysis
- Structure alignments in relation to existing investments
- Treatment in the corporate tax returns
- Advance pricing agreements (APAs)
- Transfer pricing documentation
- Review of transfer pricing and a taxpayer’s co-operation duties
- The OECD Transfer Pricing Guidelines
- Best Practice recommendations
- Case study : The Luxembourg Real Estate Fund
Oliver R. Hoor is a Tax Partner in the International and Corporate Tax Department of ATOZ. He is also heading the transfer pricing practice and the German desk of ATOZ.
His professional qualifications include the Luxembourg Certified Accountant (Expert Comptable) and the German Certified Tax Advisor (Steuerberater). He holds a degree in business administration with a major in tax from the University of Applied Sciences of Trier (Germany).
Oliver has more than 15 years of practical experience in Luxembourg and international taxation with a focus on Alternative Investments (Private Equity, Real Estate, Sovereign Wealth Funds, Hedge Funds and Securitization), Mergers & Acquisitions and Multinational Groups.
Oliver has published more than 170 articles and books on Luxembourg and international taxation, including transfer pricing and the OECD Base Erosion and Profit Shifting (“BEPS”) Project, EU Law and the State Aid investigations of the EU Commission. Oliver is further a regular speaker at conferences and lecturer with House of Training.
The members of the ABBL will get a discount of 20%. The members of the ABBL are invited to insert the mention “ABBL18” in the “Coupon Code” field of the registration form.