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Luxembourg Part II UCIs, SIFs and RAIFs to report information to the Luxembourg direct tax administration by 31 May 2022

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19 April 2022

Tax opaque Part II UCIs, SIFs and RAIFs (ie in the form of an SA, SCA or Sàrl) must declare by 31 May 2022 and pay by 10 June 2022 to the Luxembourg tax authorities a 20% tax on income and gains derived from Luxembourg real estate during 2021. Part II UCIs, SIFs and RAIFs also have to declare by 31 May 2022 (i) their holding (or absence of holding) of Luxembourg real estate property in 2020 or 2021 if they are tax opaque and (ii) their conversion into a transparent legal form (SCS, SCSp or FCP) if they were tax opaque in 2020 or 2021 and held Luxembourg real estate property at that time. 

New 20% levy for tax opaque Part II UCIs, SIFs and RAIFs holding Luxembourg real estate property

The Luxembourg budget law for 2021 introduced a new 20% levy on income and gains derived from Luxembourg real estate property (prélèvement immobilier) held directly or indirectly via certain entities by Part II UCIs, SIFs and RAIFs, each organised under the corporate form of either an SA (public limited liability company), SCA (société en commandite par actions) or Sàrl (société à responsabilité limitée) (the Funds).

Annual tax reporting on real estate income and gains for tax opaque Part II UCIs, SIFs and RAIFs

Funds that are liable to the new 20% levy must report information on income and gains derived from Luxembourg real estate property to the Luxembourg direct tax administration (Administration des contributions directes) by 31 May and settle their liabilities by 10 June of each relevant year (starting from 2022).

One-off declarative statement on the holding or absence of holding of Luxembourg real estate property by tax opaque Part II UCIs, SIFs and RAIFs

In addition, the Funds are required to report information on the holding or absence of holding of Luxembourg real estate property for the years 2020 and 2021 by 31 May 2022, irrespective of whether or not such investment vehicles currently hold Luxembourg real estate property or did so in the past.

One-off declarative statement on the conversion of tax opaque Part II UCIs, SIFs and RAIFs holding Luxembourg real estate property into SCS, SCSp or FCP

Furthermore, Part II UCIs, SIFs and RAIFs that converted from a SA, SCA or Sàrl corporate form into a SCS, SCSp corporate form or FCP in 2020 or 2021 and that held Luxembourg real estate property directly or indirectly via certain entities at the time of conversion have to report information on such conversion to the Luxembourg direct tax administration by 31 May 2022.

EUR 10,000 fine in the case of non-compliance

The reporting of information on the holding or absence of holding of Luxembourg real estate property as well as on any conversion will be a one-off obligation. Non-compliance with such reporting obligations by 31 May 2022 may result in a lump sum fine of EUR 10,000 being imposed.

On 20 January 2022, the Luxembourg direct tax administration published a circular providing helpful guidance in view of the reporting of information.

The reporting forms can be found here.

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