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Luxembourg real estate levy new reporting requirement

Money real estate Luxembourg introduced this new mandatory filing in the law of 19 December 2020 to prepare for the collection of the real estate levy. The real estate levy applies to income derived from real estate located in Luxembourg.

The Luxembourg tax authority published a circular (see below external links – document in French) with further guidance on the reporting obligation.

Who is subject to this new reporting obligation?

The following entities are subject to this new reporting obligation for the real levy:

  • All Luxembourg investment funds are considered (including: SA, Sà rl and SCAs) and funds that are covered by the Luxembourg laws on UCI Part II funds, SIFs and RAIFs. This is irrespective of whether or not they held real estate assets located in Luxembourg during 2020-2021 (either direct or via tax-transparent entities).
  • Luxembourg investment funds covered above, that changed their legal form from “non-transparent” to “transparent” vehicle (example: conversion into SCS, SCSp or FCP) in 2020-2021 and that held at least one Luxembourg real estate asset at the time of the change of legal form (either directly or via tax-transparent entities).

Real estate levy

Investment funds falling under with real estate assets located in Luxembourg have to declare their Luxembourg-source real estate income for each calendar year (so-called: “Statement on the levy on real estate”).

This is income will then be subject to 20% real estate levy. Through the declaration, these investment funds are deemed to have complied with the aforementioned statement of information.

Filing deadline

Filing needs to be done prior to: 31 May 2022.

Penalties

Failing to report on time may result in a penalty from the Luxembourg tax authority of EUR 10,000.

Comment / observation

It is intriguing, to say the least, that all funds have to file weather or not they held real estate in Luxembourg. It is also not clear if this will become a recurring filing going forward.

Actions

Investment funds falling under above criteria must provide information on their holding (or non-holding) of Luxembourg real estate assets. They have to file an electronic report (either “Statement of information on the holding or the absence of holding of real estate located in Luxembourg” via the MyGuichet.lu portal (Luxembourg government portal).

If you have not already filed, get in touch with your administrator to organize this with you.

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External links