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The law of 19 December 2020 introduced this mandatory declaration to prepare for the collection of the property tax, which applies to income derived from real estate located in Luxembourg. In this respect, the Luxembourg tax authorities published a circular on January 20, 2022 in order to clarify certain notions relating to this obligation and to the property tax (PRE_IMM circular n°1 of January 20, 2022).

Who is affected by this reporting obligation?

  1. All Luxembourg investment funds which are “opaque” (for example, those in the form of SA, Sà rl or SCA) and which are covered by the Luxembourg laws on UCIs, SIFs or RAIFs, part II, whether or not they hold real estate assets located in Luxembourg during calendar years 2020 and 2021 (directly or through fiscally transparent entities).

  2. Luxembourg investment funds referred to in point 1 which have changed their legal form from an “opaque” vehicle to a “transparent” vehicle (for example, by transforming into an SCS, SCSp or FCP) during the calendar years 2020 and 2021 and who held at least one Luxembourg property at the time of the change of legal form (directly or via a fiscally transparent entity).

What needs to be done?

The investment funds concerned must provide information on their holding/non-holding of Luxembourg real estate assets by filing a single electronic declaration (Information statement on the holding or absence of holding of real estate located in Luxembourg or on the change of legal form) through the MonGuichet.lu gate. Compliance with this information obligation is a preliminary step in determining whether these funds are subject to property tax.

Through the MonGuichet.lu portal, the investment funds concerned holding real estate located in Luxembourg must declare their real estate income from Luxembourg sources for each calendar year (Declaration on property tax) and pay the property tax of 20% respectively no later than May 31 and June 10 of the following calendar year. By the statement, these investment funds are deemed to have complied with the aforementioned information statement.

When is the deadline?

The declaration of information or declaration on the property tax must be filed by May 31, 2022.

Penalties

If an investment fund concerned does not declare within the time limits, the Luxembourg tax authorities may impose a fixed penalty payment of EUR 10,000.

How can we help?

The Tax Partners and your usual contacts at Arendt & Medernach are at your disposal to discuss and advise you on the above rules and help you file the information declaration or the declaration on the property tax via the MonGuichet.lugate.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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