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By Emilien LEBAS, Partner, Head of International Tax, Tax controversy dispute resolution leader Valentine PLATEAU, Manager, International Tax, KPMG Luxembourg
On 26 February 2025, the Luxembourg administrative tribunal (Tribunal administratif, 26 février 2025, n° 47358) (the “administrative Tribunal” or the “Tribunal”) had to rule on whether a loan should be requalified as hidden capital contribution and whether interest expenses deriving from it should be considered as non-tax deductible.
Summary of the case
On 20 October 2020, the Luxembourg tax authorities (“LTA”) challenged the 2017 tax return of a taxpayer regarding a loan payable, considering that interest expenses accruing on such loan...
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