Updated rules on tax residence certificates for UCIs, now including RAIFs

In the new Circular of 8 December 2017 (the "Circular"), which replaces Circular L.G. – No. 61 of 12 February 2015 dealing with the issuing of tax residence certificates for UCIs, the Luxembourg Tax Administration now includes reserved alternative investment funds ("RAIFs") governed by the Luxembourg Law of 23 July 2016 on reserved alternative investment funds (“RAIF Law”) in these guidelines. The Circular also includes an updated list of countries with double tax treaties (“DTT”) that apply (or not) to UCIs. The following jurisdictions have been added to the list of countries granting DTT access to corporate UCIs: Andorra, Brunei, Croatia, Estonia, Serbia and Uruguay.

The issuing of tax residence certificates is of particular interest for UCIs to claim for reduced withholding tax rates or exemptions under applicable DTT. However, a tax residence certificate for a corporate UCI (i.e., established under the form of a limited company) may also be issued on the basis of Luxembourg domestic laws. This certificate may in all events be issued for corporate UCIs if they have established their statutory seat or their central administration in Luxembourg.

For other UCIs (governed by the Law of 17 December 2010 relating to undertakings for collective investment, as amended and the Law of 13 February 2007 on specialised investment funds, as amended), we refer to our Newsletter May 2015 .

The Circular does not apply to RAIFs that qualify as investment companies in risk capital, i.e. RAIF-SICARs governed by Article 48 of the RAIF Law. RAIF-SICARs are fully subject to corporation taxes and should hence benefit from DTT access in the same way as any other ordinary company.

The Circular further clarifies (i) certain aspects for DTT access for FCPs or other transparent entities (such as a SCS/SCSp) as well as (ii) the application procedure for tax residence certificate (for DTT or domestic purposes) for RAIFs.