Taxation of SOPARFI in Luxembourg

Taxation of SOPARFI in Luxembourg

Updated on Wednesday 17th May 2017

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Taxation-of-SOPARFI-in-Luxembourg.jpgThe SOPARFI in Luxembourg is taxed following the regulations for resident companies. In 1990, the local authorities introduced this new type of legal structure, after the implementation of the European Union’s Parent- Subsidiary Directive, which entitles a SOPARFI structure to benefit from participation exemptions referring to dividends and capital gains, under specific conditions. A SOPARFI structure is also entitled to benefit from the effects of the double taxation treaties signed here and our team of financial agents can provide more information on the stipulations of such agreements. 


Withholding taxes for SOPARFIs in Luxembourg  

Foreign investors interested in opening an investment fund in Luxembourg may establish a SOPARFI, which designates a financial holding company. A SOPARFI is generally taxed as a company, but it carries out holding or financial activities
As a general rule, companies taxed in Luxembourg are imposed with withholding taxes, which can vary in value depending on the specific category in which the respective company enters. Although the SOPARFI is taxed as a company, it can be exempted from paying the withholding tax on dividends if the beneficiary owns 10% of the company’s capital for a minimum period of 12 months. However, there are other numerous conditions in which the withholding tax on dividends will not apply and our team of financial representatives can provide further advice on this matter. 

Capital gains for a SOPARFI  

Businessmen interested in wealth management in Luxembourg should know that they can benefit from numerous tax exemptions when investing in this country. In a SOPARFI, the capital gains are not taxable and this regulation takes into consideration all types of related operations. 
At the same time, it is important to mention that the company’s profits may be exempted from the corporate tax, if specific conditions are met, related to the situation of the parent company, its subsidiary, the ownership aspects. 
Please contact our team of financial consultants for more details on the taxation of a SOPARFI in Luxembourg


  • Anna 2017-05-17

    I'd be interested in knowing further information on the Parent - Subsidiary Directive.

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