On 9 March 2022, the Luxembourg Ministry of Finance introduced a new Bill 7974 to the Parliament to amend the current interest deduction limitation rules under the EU Anti-Tax Avoidance Directive (ATAD).
The Bill excludes ‘EU securitisation vehicles (SVs)’ through which entities benefit from the exemption from the interest limitation rules under financial undertakings. As a result, SVs will be subject to fully interest limitation rules, and the tax deduction for interest and other borrowing costs is limited to 30% of EBITDA or EUR 3 million, whichever is higher. The amended provision will apply from 1 January 2023.
