Taxation of UCI in Luxembourg

Taxation of UCI in Luxembourg

Updated on Monday 25th March 2019

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Taxation-of-UCI-in-Luxembourg.jpgThe undertakings for collective investments (UCI) in Luxembourg are taxed following the regulations applicable under the Law of 2010. They are governed by the rules of law available for the Part II of the Luxembourg legislation of 17 December 2010. UCI in Luxembourg can be set up under five different legal entities, on which our team of financial representatives can offer more details. 

Taxation aspects for UCI structures in Luxembourg 

Foreign investors interested in private wealth management in Luxembourg must know that they can benefit from relevant tax exemptions when investing in this country. 
The UCI vehicles registered here are liable to paying the subscription tax, which is imposed at the standard rate of 0,05% of their net assets.
The tax is calculated on a quarterly basis, but it is important to know that certain activities carried out by UCI structures can be imposed with a smaller subscription tax, imposed at the rate of 0,01%.
The subscription tax applicable at the rate of 0,01% is available in the case of the following types of vehicles:
money market cash funds;
institutional funds.

Exemptions from paying the subscription tax in Luxembourg

Investors who want to open an investment fund in Luxembourg registered as an UCI vehicle can also benefit from an exemption from paying the subscription tax, which is available in the following cases:
special institutional money market cash funds;
special pension funds;
investment funds which invest in other funds that are liable to the subscription tax;
microfinance investment funds;
exchange traded funds

UCIs registered as SICAVs in Luxembourg  

Another important aspect related to the taxation of UCI refers to the vehicles set up as SICAVs (investment companies with variable capital). In this case, the company can benefit from the provisions of the double taxation treaties signed by Luxembourg
As a general rule, UCIs set up as exchange traded funds will not benefit from the above mentioned regulation, unless special conditions are met, on which our team of financial agents can provide further information. 
Investors are invited to contact our team of financial consultants for in-depth details on the tax compliance applicable to UCI structures