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By Hermann SCHOMAKERS and Panagiotis ROUMELIOTIS, KPMG Luxembourg
On 11 May 2021, the Luxembourg administrative tribunal ruled that capital contributions from a parent company without issuance of shares by its subsidiary should not be considered for the exemption from 15% dividend withholding tax. This domestic tax exemption requires the parent to hold directly, for an uninterrupted period of at least 12 months and on the date of the dividend payment, a participation of at least 10% or with a purchase price of at least 1,200,000 Euro in the capital of the subsidiary.
While the classical share premium is recognized since decades, the capital contribution...
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