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By Hermann SCHOMAKERS and Panagiotis ROUMELIOTIS, KPMG Luxembourg
On 11 May 2021, the Luxembourg administrative tribunal ruled that capital contributions from a parent company without issuance of shares by its subsidiary should not be considered for the exemption from 15% dividend withholding tax. This domestic tax exemption requires the parent to hold directly, for an uninterrupted period of at least 12 months and on the date of the dividend payment, a participation of at least 10% or with a purchase price of at least 1,200,000 Euro in the capital of the subsidiary.
While the classical share premium is recognized since decades, the capital contribution without issuance of shares was introduced in 2009 with the so-called account 115 of the...
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