Decision of High Administrative Court dated April 17, 2025
The Luxembourg High Administrative Court held on April 17, 2025, that聽interest free loans received by a Luxembourg company from its shareholder must be recharacterized as equity contributions and thus were not deductible by the company from its net wealth tax basis.
The court also held that a Malaysian branch of the company did not qualify as a permanent establishment (PE) in Malaysia under the Luxembourg-Malaysia income tax treaty and thus income from assets held by the branch were not exempt from Luxembourg net wealth and corporate taxes. The court found that the branch lacked the necessary autonomy and operational independence required to be classified as a PE. It had no separate bank account, outsourced management, and did not engage in significant economic activities.
Read a May 2025 report prepared by 乐鱼（Leyu）体育官网鈥檚 EU Tax Centre