The actual substance of a company and its daily management in the country in which it is domiciled have become key elements in the approval of tax arrangements by international tax treaties and international tax audits.
Substance matching a company's operations, in particular with regard to premises, plant and equipment, plays a key role in designing cross-border tax schemes. A company's day-to-day management must similarly be in the hands of a person with a suitable management presence in the Grad-Duchy.
Application of the 183-day rule
Employees of Luxembourg companies must fulfit certain criteria imposed by the tax laws of their country of residence.
In the case of an employee of a Luxembourg company living in Belgium, the Belgian tax authorities must prove the following in order to tax the employee's Luxembourg wages in Belgium:
- that the employee has not worked 183 days in the Grand-Duchy (or a pro rata number of days when working part-time)
- that the company does not have its registeres office in Luxembourg or is only domiciled there ( a "letter-box company") - that the company has not paid the wages itself.
Our company is specialised in providing advice on the implementation of substance and presence requirements in cross-border arrangements.
Specific dashboards allow permanent control of whether regulatory requirements are being met by our customers.
We can also provide help in the long-term development of your operations in Luxembourg