On 17 March 2020, the Luxembourg tax authorities (LTA) published a newsletter with tax measures for businesses in the context of the COVID-19 crisis.
The measures are twofold and relate to (i) tax filing obligations and (ii) tax payment obligations.
Filing obligations
The filing deadline for 2019 tax returns is delayed to 30 June 2020 for both corporate taxpayers and individual taxpayers.
Payment obligations
Corporate taxpayers may ask for (i) a waiver of the 2020 tax advances for corporate income tax (CIT) and municipal business tax (MBT) due for the first two quarters of 2020 and (ii) a deferral of other payments on account of CIT, MBT and net wealth tax (NWT).
To apply for the waiver of these 2020 tax advances, the taxpayer should file a form which is available online. The tax advances would then not become due and the payment of taxes would depend on the tax amount included in the tax assessment 2020. The ‘standard’ possibility to reduce advances by means of a reasoned request remains available.
For the deferral of other tax liabilities, a request needs to be filed by the taxpayer using a form that is available online. Under this procedure, an extension of four months without late interest payment accrual (normally at a rate of 0.6% per month) would apply. The extension only applies to the extent the tax amount is paid in full at the latest upon the expiry of the four months period starting from the original due date of the taxes. The extension applies to CIT, MBT and NWT that were not due prior to 29 February 2020. Wage tax is explicitly excluded, as are withholding taxes (such as for dividends and management fees).
Luxembourg is officially in a state of emergency (currently, for a period of three months). This allows the government to bypass the ordinary legislative process and to adopt measures more swiftly. More specific measures related to taxation as a result of the COVID-19 crisis may accordingly be announced, including on VAT.
