On 9 August 2019, Luxembourg Government submits draft law to the Parliament for the execution of the expanded hybrid mismatch rules of the European Union (EU) Anti-tax Avoidance Directive as amended (ATAD2). The draft law aims at broadening the scope of the anti-hybrid mismatch provisions, which was introduced into Luxembourg law effective from 1 January 2019. This will also provide a wider range of tax advantages obtained by taxpayers resident in EU Member states due to the hybridity of an instrument or an entity within the context of transactions both within the EU but also with third countries.
The law will be effective for tax years starting on or after 1 January 2020, except for the reverse hybrid rules which will apply only as of tax year 2022.
