Agefi Luxembourg - octobre 2026

AGEFI Luxembourg 38 Octobre 2026 Emploi & Droit By Emilien LEBAS, Partner, Head of International Tax, Tax controversy & dispute resolution leader, & Sylvain RABOUINE, Senior Tax Adviser, International Tax, KPMGLuxembourg O n 12August 2026, the Lux­ embourgAdministrativeCourt ofAppeal ( Cour adminis­ trative, 12 août 2026, n°53244C) (the “AdministrativeCourt” or the “Court”) ruledon the applica­ tionof the intellectual property (“IP”) tax regime provided for by Article 50ter of the Luxembourg IncomeTax Law(“LITL”) to in­ come derived fromtwo IP assets coveredbypatent applications. The Court overturned the judgment of the Luxem­ bourgAdministrative Tribunal ( Tribunal administratif, 18juin2025,n°48315 )(the“ AdministrativeTribunal ” orthe“ Tribunal ”)andheldthatthetaxpayerwasen­ titled to the 80% exemption underArticle 50ter LITL in respect of both the capital gain derived from the transfer of a usufruct over a first invention (the “ First IP Asset ”) and the royalties received from the ex­ ploitationofasecondpatent(the“ SecondIPAsset ”). Summary of the case Thetaxpayerwascarryingoutresearchanddevelop­ ment (“ R&D ”) activities. The dispute concerned two separate IP assets developed by one of its employees and relating to the conversion of carbon dioxide into fertilizerusingammonia:theFirstIPAsset,overwhich thetaxpayertransferredausufruct,andtheSecondIP Asset,which the taxpayer licensed toanaffiliateden­ tity.Therecipientoftheusufructandthelicenseewere the same company (the “ AffiliatedEntity ”). The IPassets The patent application for the First IPAsset was filed bytheAffiliatedEntityinOctober2017.InNovember 2018, the taxpayer and the Affiliated Entity entered into an agreement under which the taxpayer trans­ ferred the usufruct over the First IPAsset to theAffil­ iated Entity. The patent was ultimately granted in April2019.Thetaxpayerrealizedacapitalgainonthe transfer of the usufruct. The patent application for the Second IPAsset was filedbythetaxpayeritselfinApril2016,andthepatent was granted in October 2017. Under a license agree­ ment concluded in May 2016, the taxpayer granted the Affiliated Entity the right to use and exploit the Second IPAsset in exchange for royalties. Errors in the 2018 tax return Following the issuance of the 2018 tax assessments, the taxpayer filedanamended tax return in July2021 to correct two errors in its original return: The taxpayer had omitted to claim the exemption provided for inArticle 50ter LITLon the capital gain arising fromthe transfer of the usufruct over the First IPAsset. TheroyaltiesrelatingtotheSecondIPAssethadbeen reported under the former IP regime provided for in Article 50bis LITL, although the taxpayer considered thatArticle 50ter LITLshouldhave applied. The tax office declined to revise the tax assessments onthegroundsthatinsufficientinformationhadbeen provided. Asecond amended return was filed inAugust 2021. However, the tax office informed the taxpayer that it would not be able to process that return and issue amended tax assessments before the expiry of the threemonth deadline for filing a claim against the original assessments. To preserve its rights, the taxpayer filed an adminis­ trativeclaim( réclamation )withtheDirectoroftheLux­ embourgtaxauthorities.Asthelatterdidnotrespond, the taxpayer brought thematter before the Tribunal. Regarding the First IP Asset, the tax authorities broadly challenged the taxpayer’s ownership of the IP rights. They relied primarily on the fact that the Affiliated Entity, rather than the taxpayer, had filed the patent application in October 2017, whereas the agreement transferring theusufruct to theAffiliated Entity was not concluded until November 2018. They inferred that theAffiliated Entity already held the relevant rights and considered that the taxpayer hadnotdemonstratedgenuinecontrolovertheasset. The taxpayer explained that this sequence was in­ tended to secure patent protection ahead of the planned transfer and avoid unnecessary duplicate filings. The tax authorities also questioned the tax­ payer’s evidence of ownership because the transac­ tion involved affiliated companies. Regarding the Second IPAsset, the tax authorities argued that the taxpayer had failed to complywith the tracking and documentation requirements under Article 50ter LITL. In their view, the records had been prepared retrospectively and did not ad­ equately demonstrate the extent to which the em­ ployee inventor’s remuneration related to the development of the Second IPAsset. In June 2025, the Tribunal rejected the taxpayer’s claims. In sub­ stance, the judges considered that the taxpayer had not established its ownership of the First IP Asset and had not complied with the documentation re­ quirements of Article 50ter LITL in relation to the Second IPAsset. The taxpayer appealed. Decisionof theCourt The Court disagreed with the Administrative Tri­ bunal’s conclusions and ruled in favor of the tax­ payer in respect of both assets, although on different grounds. The First IPAsset For the First IP Asset, the sole issue was ownership of the underlying IP rights. Al­ thoughArticle 50ter LITLdoes not expressly state that the taxpayer must own the relevant IP rights, the Court ruled that ownership is inherent in the regime. In principle, the taxpayermust own the IPrights cre­ ated, developed, or improved through its own R&D activities, and the income must arise from the exercise of those rights. However, the Court did not ex­ amine each of the parties’ own­ ership arguments separately. Instead, it focused on the inconsis­ tency between the position under­ lying the original tax assessments and the position subsequently defended by the tax authorities. The judges observed that the tax office had attributed the entire capital gainarising fromthe transfer of the usufruct to the taxpayer and had taxed it accord­ ingly. By doing so, the Court held that the tax au­ thorities had implicitly but necessarily treated the taxpayer as the owner of the First IPAsset. TheCourt ruled that theprincipleof consistencypre­ ventedthetaxauthoritiesfromsubsequentlydenying that ownership solely to refuse the benefit of the IP regime.Inparticular,itobservedthattheyhadnotex­ plainedwhythecapitalgainshouldremaintaxableat the level of the taxpayer if the latter did not own the underlying asset. The judges also noted that, when it issued the original tax assessments, the tax office al­ ready knew that the Affiliated Entity had filed the patent application. The judges therefore treated the taxpayerastheowneroftheFirstIPAssetforthepur­ poses of Article 50ter LITL and granted the 80% ex­ emption on the adjusted net eligible income derived fromthe transfer of the usufruct. The Second IPAsset FortheSecondIPAsset,theCourtexaminedwhether the taxpayer hadprovided sufficient evidence to sat­ isfy the tracking and documentation requirements under Article 50ter LITL. The judges relied on the patent identifying the employee as the inventor, the employee’s pay slips and timesheets, his statement confirmingtheresearchperiod,andregistersseparat­ ing the income and expenditure relating to each IP asset. Taken together, those documents allowed the relevant income and expenditure to be identified by nature, amount and period. In addition, the Court found that the tax authorities had not demonstrated that the supporting documents had been prepared retrospectively. The pay slips appeared to have been issuedwhenthesalarieswerepaid,whilenothingin­ dicated that the timesheets had not been prepared during the relevant period. Finally, the evidence showed that the employee had worked exclusively on the Second IPAsset between March2015andApril 2016. The judges, therefore, ac­ ceptedtheemployee’sentireremunerationforthatpe­ riod as eligible expenditure without requiring any furtherapportionment.TheCourtconsequentlyruled that the taxpayer hadsatisfied thedocumentation re­ quirements and granted the 80% exemption on the adjustedneteligibleincomederivedfromtheroyalties relating to the Second IPAsset. Key takeaways Given the limitedLuxembourg case law interpreting Article 50ter LITL (1) , this decision is noteworthy be­ causeitaddressestwopracticalissues:theownership ofeligibleIPassetsandtheevidencesupportingeligi­ ble income and expenditure. However, it provides clear guidance only on the latter. Regarding the doc­ umentation,thejudgmentillustratesthefactsensitive and holistic approach taken by the judges when as­ sessing the applicable requirements. Rather than re­ lying on a single document or imposing a purely formal test, the Court considered a combination of supporting documents. The decisive question was whethertheevidence,viewedasawhole,allowedthe relevant R&D activities, income, and expenditure to be identified and traced reliably. The taxpayer succeeded because it could produce a coherentsetofsupportingdocumentswhoseauthen­ ticity had not been challenged. We would therefore strongly recommend that taxpayers maintain asset­ specificrecordsastherelevantR&Dactivitiesareper­ formedandtherelatedexpenditureisincurred.Those records shouldshowwhocarriedout theR&Dactiv­ ities, when those activities took place, which IP asset theyconcernedandhowtherelatedexpenditurewas determined. RegardingtheFirstIPAsset,despitethefavorableout­ comeforthetaxpayer,itisregrettablethatthedecision leaves a substantive question unresolved. The Court did not address the central issue of whether the tax­ payer actuallyowned theFirst IPAsset under the rel­ evantIPandtaxlawprinciples.Inparticular,itdidnot determine whether the filing by theAffiliated Entity preventedthetaxpayerfrombeingtreatedasthelegal or economic owner of the underlying IP rights. In­ stead, the Court based its conclusion on the inconsis­ tent tax treatment adopted by the tax authorities in this particular case. Interestingly,thisreasoningmay,atfirstglance,appear to contrast with that in another decision of the Court ( Couradministrative,20février2024,49388C ) (2) ,inwhich a taxpayer was taxed on income derived from subli­ censing and transferring exploitation rights despite not being the economic owner of the underlying IP. Thedistinctionmaylieintherightsthatgeneratedthe income.Incase49388C,thetaxpayerheldclearlyiden­ tified contractual exploitation rights. In the present case, by contrast, the tax authorities disputed that the taxpayer held the usufruct whose transfer generated the taxable gain and did not propose any alternative characterization of that gain. The two decisions are therefore not necessarily contradictory, although the Court didnot expressly address this distinction. Finally, this decision highlights the importance of the principle of consistency as a safeguard for taxpayers against contradictory positions taken by the tax au­ thorities. More generally, when the Luxembourg tax authorities rely on a particular characterization of an assetortransactiontoimposetax,theyshouldnotsub­ sequentlyadoptaninconsistentcharacterizationafter­ wardwhendeterminingwhetherarelatedexemption applies, unless they clearly explain the legal basis for the different treatment. 1)ForanotherrecentjudgementconcerningArticle50terLITL,seeAd­ ministrativeTribunal,6March2026,n°50123. 2)Pleaserefertoourarticleint hisrespect:E.LebasandV.Plateau, “Tax controversy series – Administrative court of appeal decision on the eco­ nomic appreciation concept”, AGEFI Luxembourg, December 2024 – Page39. Administrative Court decision on the IP regime: Ownership and documentation requirements for eligible IPassets Par Philippe PETIT, fondateur, VITACEAE Transactions* P our un investisseur établi au Luxembourg, acquérir un domaine de Champagne ou de Bourgogne au travers dʹune société paraît naturel. Depuis 2022, ce choix ne met plus lʹopéra­ tion à lʹabri du contrôle français du foncier agricole. Pendant longtemps, la cession de parts sociales a été la voie la plus discrète pour acquérir du foncier agricole en France. Le droit de préemption de la SAFER visait dʹabord la vente des biens euxmêmes (article L. 1431 du Code rural et de la pêchemaritime);lacessiondestitresdʹune société propriétaire ou exploitante y échappaitlargement.Pourunfamilyoffice ou une holding luxembourgeoise, habi­ tuésàdétenirleursactifspardesvéhicules dédiés, le schéma allait de soi. La loi du 23 décembre 2021, dite loi Sempastous, a crééun contrôle spécifique des sociétés possédant ou exploitant du foncier agricole, en vigueur depuis 2022. Son objet est explicite : lutter contre la concentration excessivedes terres et favo­ riser lʹinstallation (article L. 3331). Concrètement, la prise de contrôle dʹune telle société est soumise à lʹautorisation préalable du préfet lorsque lʹacquéreur, une fois lʹopération réalisée, dépasse un seuildʹagrandissementsignificatiffixépar région (article L. 3332, I et II). Le seuil sʹapprécie en remontant la chaîne Cʹest le point qui concerne directement lesstructuresluxembourgeoises.Lorsque lʹacquéreur est une personne morale, sa situationauregardduseuil est appréciée à lʹégard de toutes les personnes phy­ siques qui la contrôlent en dernier lieu, directement ou indirectement, en addi­ tionnant lʹensemble des biens agricoles quʹelles possèdent ou exploitent (article L. 3332, III). Lʹinterposition de sociétés nefractionnedoncpaslecalcul.Lanotion de contrôle est celle du Code de com­ merce, et le dispositif vise aussi la prise de contrôle dʹune société qui en contrôle une autre (article L. 3332, IV). Une instruction confiée à la SAFER La demande est déposée auprès de la SAFER, qui lʹinstruit pour le compte du préfet (article L. 3333, I). EnChampagne, le Comité interprofessionnel du vin de Champagne peut présenter des observa­ tions écrites. Si lʹopération est jugée contraire aux objectifs de la loi, les parties peuvent proposer des engagements, par exemple la vente ou lamise à bail de sur­ faces au profit dʹun agriculteur qui sʹins­ talle (article L. 3333, IV). La SAFER conserve en outre la faculté de préempter la totalité des parts dʹune société agricole lorsque cette préemption sert lʹinstallation dʹun agriculteur (article L. 1431). Des sanctions qui portent sur lʹopération ellemême Une prise de contrôle réalisée sans lʹauto­ risationrequiseestnulle.Lʹactionennullité peutêtreexercéedanslesdouzemoissui­ vant la connaissance de lʹopération par lʹadministration, et une amende pouvant atteindre2%dumontantdelatransaction peut sʹy ajouter (article L. 3332, VI). Pour un investisseur, le risque nʹest donc pas seulementfinancier:cʹestlavaliditémême de lʹacquisitionqui est en jeu. Ce que cela change enpratique Le choix du véhicule reste légitime, pour des raisons de gouvernance, de transmis­ sion oude financement. Il ne doit simple­ ment plus être pensé comme un moyen dʹéviterlecontrôle.Lʹopérationseprépare en intégrant dès lʹorigine la cartographie des personnes qui contrôlent la structure acquéreuse, le seuil applicable dans la régionconcernée,etlecalendrierdʹinstruc­ tion, à traiter comme une condition sus­ pensive. Lʹanalyse juridique et fiscale relève des conseils de lʹinvestisseur, en France comme auLuxembourg. En résumé Lacessiondepartsdʹunesociétéagricole française est contrôlée depuis 2022. Le seuil sʹapprécie au niveau des per­ sonnes physiques qui contrôlent la struc­ ture acquéreuse. Lʹinstruction passe par la SAFER ; en Champagne,lʹinterprofessionpeutsepro­ noncer. Sansautorisation,lʹopérationestnulle:le calendrier se prépare en amont. * www.vitaceae.fr Vignoble français : le véhicule ne dispense pas du contrôle ©Pexels