2015年-IMF国际货币组织全球_Luxembourg_Selected_Issues_28页_993kb

Luxembourg Tax Policy Challenges Summary

Core Content

This document provides an analysis of Luxembourg's tax policy in the context of international tax reforms and its implications for the country's revenue base and financial sector. It outlines the current tax structure, key challenges posed by evolving tax standards, and potential policy responses.

Main Points

• Tax System Overview:
  Luxembourg has a low-rate tax system that includes:

  • The lowest VAT rates in the EU and OECD.
  • Low excise rates on fuel, alcohol, and tobacco.
  • A range of deductions and exemptions that lower the effective corporate income tax (CIT) rate.
  • A favorable tax regime for intellectual property (IP) rights, allowing up to 80% of net royalties and capital gains to be exempt from taxation.

• International Tax Transparency and Reform:

  • The OECD/G20 Base Erosion and Profit Shifting (BEPS) project and similar EU initiatives may lead to changes in tax standards, affecting Luxembourg's attractiveness for multinational corporations (MNCs) and banks.
  • The U.S. federal tax changes on unrepatriated profits could impact revenue from U.S. firms operating in Luxembourg.
  • Luxembourg has taken proactive steps to align with international standards, such as implementing the OECD Standard for Automatic Exchange of Financial Account Information and sharing advance tax rulings (ATRs) bilaterally.

• Financial Sector Dominance:

  • The financial sector is a major contributor to Luxembourg's economy and tax revenue.
  • It accounts for nearly half of overall gross output and about 27% of total value added.
  • Despite its dominance, the sector's contribution to GDP is limited due to the nature of intermediary operations, which have low value added.

• Revenue Structure:

  • The financial sector contributes about 18% of total revenues (including ancillary industries and employees' personal income tax).
  • Excise and VAT on fuel and tobacco are largely driven by nonresident demand.
  • Retained e-VAT is projected to decline significantly due to new EU rules, from 2.3% of GDP in 2014 to around 1% in 2015 and 0.5% in 2018.

• Economic Implications:

  • Luxembourg's tax policies have supported its role as a financial and commercial hub, attracting MNCs and banks.
  • The country's small, open economy is particularly vulnerable to changes in EU, OECD, and U.S. tax practices.
  • The financial sector's revenue share has declined from a pre-crisis peak of 21.5% in 2007 to about 18% in 2014.

Key Information

• VAT and CIT Rates:

  • Luxembourg's standard VAT rate is 17%, with reduced rates for certain goods and services.
  • The statutory CIT rate is 29.2%, which is among the highest in the OECD, but effective rates may be lower due to exemptions and deductions.

• Excise Revenues:

  • Fuel excise revenues in Luxembourg reached 2% of GDP in 2013, more than double the levels in neighboring countries.
  • Tobacco excise revenues amounted to 1.2% of GDP, compared to 0.5% in Belgium, France, and Germany.

• E-VAT and EU Rules:

  • E-VAT receipts have been a growing source of revenue, but new EU rules will shift the tax burden to the country of residence, reducing Luxembourg's share.
  • Luxembourg's e-VAT share is projected to fall to 30% in 2015–16, 15% in 2017–18, and zero thereafter.

• Investment Funds and Subscription Tax:

  • Investment funds benefit from favorable tax treatment, including exemption from CIT and net wealth tax.
  • The subscription tax rate is 5 basis points for most funds, with lower rates for qualifying money market funds and special investment vehicles.

• Policy Recommendations:

  • Selective Rate Increases: Consider modest increases in excise and VAT rates to broaden the tax base.
  • Base Broadening: Explore measures to increase the tax base, such as reevaluating reduced VAT rates and increasing taxes on real estate and motor vehicles.
  • Strengthening Tax System: Diversify revenue sources and enhance the robustness of the tax system to withstand future changes in international tax standards.

Conclusion

Luxembourg's tax policy is under pressure from international tax reforms and evolving standards. The country's tax base is vulnerable to changes in EU, OECD, and U.S. tax practices. The upcoming tax policy review provides an opportunity to address these challenges by diversifying revenue sources, increasing tax rates where appropriate, and maintaining Luxembourg's international competitiveness.