Taxation of UCITS in Luxembourg

Taxation of UCITS in Luxembourg

Updated on Tuesday 02nd May 2017

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Taxation-of-UCITS-in-Luxembourg.jpgThe undertakings for collective investments in trasferable securities (UCITS) are taxed following the applicable legislation for investment funds. The UCITS in Luxembourg can be exempted from paying certain taxes imposed to other types of business structures available in this country and our team of financial representatives can provide more information on the taxation scheme available for this vehicle, as well as on the tax exemptions that UCITS can benefit from. 
 

1. Registration of UCITS in Luxembourg 

 
Foreign businessmen who want to open an investment fund in Luxembourg established as an UCITS should know that the registration procedure stipulates a small registration fee – of EUR 75, which is only imposed once, during the incorporation. UCITS can be set up as SICAF in Luxembourg or SICAV. The first legal entity refers to an investment company with fixed capital, while the other designates an investment company with variable capital.
 

2. Subscription tax for UCITS  

 
All investment funds in Luxembourg which are registered as UCITS are imposed with an annual subscription tax. As a general rule, the subscription tax is applicable at the rate of 0,05% on the net asset value of the fund. 
 
However, there are certain categories of UCITS that can be imposed with a much lower subscription tax, applicable at the rate of 0,01%. 
 
The 0,01% rate is available for the following types of investment vehicles
 
investment funds used as money market instruments;
funds invested in deposits related to credit institutions;
umbrella funds – in the case in which the shares of the fund are reserved for at least one institutional investor. 
 
At the same time, investors should know that the fund can also benefit from an exemption from paying the subscription tax and our team of financial agents can provide in-depth details on the applicability of the regulation. 
 

3. Taxation of income for UCITS in Luxembourg  

 
The UCITS structure in Luxembourg is not required to pay the income tax or the capital gains tax
 
Distributions on an investment fund in Luxembourg are exempted from the withholding tax, regardless if they are paid to local or foreign investors. 
 
Businessmen are invited to contact our team of financial experts for further information on the taxation of the UCITS in Luxembourg
 

Comments

  • Derek 2017-04-29

    Thanks for the details referring to the subscription tax.

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