The actual substance of a company and its daily management in the country in which it established its head office 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

Foreign employees of Luxembourg companies must fulfill certain criteria imposed by the tax laws of their country of residence.

In the case of a Belgian resident employed by a Luxembourg company, in order to prevent the Belgian tax authorities from taxing the employee's Luxembourg wages in Belgium, the employee must bring proof of the following :
- that the employee has worked at least 183 days in the Grand-Duchy (or a pro rata number of days when working part-time);
- that the company does have its registered office in Luxembourg and is not only domiciled there (a so called "letter-box company");
- that the company has 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 wether regulatory requirements are being met by our customers or not.

We can also provide help in the long-term development of your operations in Luxembourg.