The British Chamber of Commerce (BCC) in Luxembourg has published its survey on Tax Competitiveness.

The BCC has revealed that representatives of its Tax Group met with senior officials within the Ministry of Finance and the Direct Tax Authorities in April last year and have valued the ensuing continuing dialogue. During the meeting a number of areas were highlighted and discussed where the Tax Group believes Luxembourg’s tax framework could be enhanced, amid concerns that Luxembourg may be losing in attractiveness in the short and long term. The dialogue is also important in the build up to the 2017 Tax Reform.

The Survey on the Tax Competitiveness of Luxembourg stems from this meeting, and it was the intent of the Tax Group to collect/ assess first-hand how business members and contacts of the BCC value the tax environment and attractiveness of Luxembourg. The Survey was undertaken last September and was anonymous, covered corporate taxation, VAT and personal taxation, and issued to all members and contacts of the BCC. Accordingly, the results of the Survey shall not be interpreted as a reflection of the BCC’s opinion or all of its members, but solely the opinion of the 155 participants of the Survey (comprising approximately 50% of its 324-strong corporate and invividual membership).

BCC - Tax Competitivness Survey Results: some of the findings are presented here:

- A major decrease in headline CIT / MBT rate (70% importance) was deemed to be the most important to improve the tax competitiveness of Luxembourg, over Enhanced Net Wealth Tax regime (35%), Enhanced Participation Exemption regime (45%) and Statutory deadline for ATAs / APAs (32%).

- Australasia was the main area indetified (ahead of LatAm, Africa) with which new Tax Treaties should be concluded to support the international development of their business.

- Enhanced participation exemption / 0% WHT vs. other treaties (Trust, Legal, Tax, Holding members) were identified as the main Specific provisions that should be included in new tax treaties concluded by Luxembourg to support the international development of their business, compared to Funds entitlement and Favourable capital gains clauses.

- On the importance of improving the tax competitiveness of Luxembourg, Maintain low VAT rates was deemed by 79% to be critical / very important, followed by Issuance of VAT rulings (55%) and Simplified Luxembourg VAT reporting (39%).

- On VAT, 86% felt that VAT grouping would increase the attractiveness of Luxembourg as a platform for business; and 91% felt that Luxembourg should improve its VAT environment re investment funds/ increased certainty on VAT recovery right of investment funds.

- On issues critical to improve the Tax Competitiveness of Luxembourg, Simplify the tax return preparation process was highest at 37%, followed by Provide increased support in English (27%), Introduce single filing for all individuals (18%), Improvements to the tax withholding/payment process (16%), and Introduce more strictly enforced filing deadlines and processing timeframes (2%).