Circular L.G. - A. n°61 issued on February 12th 2015 (hereafter the "Circular") by the Luxembourg tax authorities (hereafter the "LTA") aims at clarifying their position with regards to the issuance of certificates of residence for undertakings for collective investments (hereafter "UCIs") as well as the specific procedure to be followed depending on the type of UCIs and the relevant country requesting the certificate of residence.
A certificate issued by the LTA only reflects the position of the LTA with regards to the residence and qualification of a UCI under a specific double tax treaty. This unilateral position may not be shared by the other treaty country.
"In the Circular, the LTA sets out three different types of certificates of residence."
The LTA sets out three different types of certificates of residence (an example of each is provided in the appendices to the Circular) that it issues depending on certain criteria detailed below.
The first type of certificate of residence (hereafter the "Type 1 Certificate") is issued in cases where:
- the Luxembourg UCI is an incorporated UCI (i.e. either a UCITS or a SIF incorporated as a SICAV or a SICAF in accordance with the law of December 17th 2010 or the law of February 13th 2007 respectively);
- a double tax treaty between Luxembourg and the other country is in force; and
- the double tax treaty applies to UCIs.
The determination whether the double tax treaty applies to UCIs can be based either on:
- an express consent by the other country;
- a clear provision in the respective double tax treaty (as understood by the LTA); or
- the LTA's interpretation of the double tax treaty in the absence of a specific provision.
The second type of certificate of residence (hereafter the "Type 2 Certificate") is issued for unincorporated UCIs, i.e. FCPs, in cases where the relevant double tax treaty includes:
- a specific provision that assimilates FCPs to an individual for the purpose of the double tax treaty; or
- a provision that includes all UCIs irrespective of their form (whether incorporated or unincorporated) in the definition of resident.
In order for the LTA to issue a Type 1 Certificate or a Type 2 Certificate, a request has to be filed with the tax office "Sociétés 6" together with a certificate from the CSSF that the UCI is subject to regulatory supervision.
The third type of certificate of residence (hereafter the "Type 3 Certificate"), that is solely based on domestic legislation, can be issued in cases where:
- the UCI is an incorporated UCI and is tax resident for Luxembourg tax purposes, by virtue of having either its statutory seat or its central administration located in Luxembourg; and
- either (i) no double tax treaty is in place with the country concerned or (ii) the certificate is required for non-double tax treaty purposes, such as withholding tax reclaims on the basis of the European fundamental freedoms, as evidenced by the ECJ's constant case-law such as the Aberdeen case (C-303/07 dated June 18th 2009) or the Santander case (C-338/11 dated May 10th 2012).
In order for the LTA to issue a Type 3 Certificate, a request has to be filed with the tax office "Sociétés 6" together with a regulatory supervision certificate from the CSSF. However, in addition to the above, a detailed explanation of the reason for which the certificate is required will also have to be provided, together with a reference to the foreign legal provision or to the double tax treaty that requires said certificate. A detailed listing of the income received by the UCI and for which the request is made will also have to be appended to the request.
In case the certificate is requested ex-ante, indications on the investment policy of the UCI have to be provided, together with the commitment that the detailed listing will be sent to the LTA at latest on June 30th of the subsequent year.
A list of the double tax treaties entered into by Luxembourg and their respective availability to UCIs can be found in the Circular as well as on the website of the LTA.
