Arendt & Medernach

Arendt has acted as issuer’s counsel to tonies SE, the world’s largest interactive audio platform and creator of a multi-billion Euro category in kids entertainment, on its successful 12,000,000 new class A shares placement with institutional investors, including certain existing shareholders, by way of an accelerated bookbuilding.

Arendt has acted as issuer’s counsel to tonies SE, the world’s largest interactive audio platform and creator of a multi-billion Euro category in kids entertainment, on its successful 12,000,000 new class A shares placement with institutional investors, including certain existing shareholders, by way of an accelerated bookbuilding.

In an environment where litigation, arbitration, risk and regulatory compliance concerns sometimes create a difficult reality for many organisations, Arendt has decided to enhance its investigations offering in order to help clients to react quickly and efficiently when confronted with the need to treat large volumes of data. With this goal in mind, Arendt has turned its attention to cutting-edge legal technology, adopting the data discovery product RelativityOne. This best-in-class solution allows the firm to confidentially and securely handle massive amounts of data to resolve complex and time-critical matters.

Arendt & Medernach advised the sponsors of Lakestar SPAC 1 SE in its IPO on the Frankfurt Stock Exchange.

Starting 26 January 2021, the new law of 22 January 2021 applies!

THERE IS NEW SHERIFF IN THE (DIGITAL) WILD WEST: THE EUROPEAN COMMISSION!

ON 28 JANUARY 2021, THE LUXEMBOURG PARLIAMENT APPROVED BILL OF LAW N°7547 IMPLEMENTING MEASURES CONCERNING THE NON-TAX-DEDUCTIBILITY OF INTEREST AND ROYALTY PAYMENTS MADE TO ENTITIES LOCATED IN NON-COOPERATIVE JURISDICTIONS.

ON 20 JANUARY 2021, THE COURT OF JUSTICE OF THE EUROPEAN UNION (CJEU) GAVE ITS RULING IN A CASE THAT RAISED THE QUESTION OF WHETHER THE PROVISION OF A COMPANY CAR TO AN EMPLOYEE IS SUBJECT TO VAT (C-288/19, QM V FINANZAMT SAARBRÜCKEN).

ON 18 DECEMBER 2020, THE OECD PUBLISHED ITS MUCH-ANTICIPATED “GUIDANCE ON THE TRANSFER PRICING IMPLICATIONS OF THE COVID-19 PANDEMIC”.

ON 17 DECEMBER 2020, THE LUXEMBOURG PARLIAMENT APPROVED THE 2021 BUDGET BILL.

FOLLOWING THE EUROPEAN COURT OF JUSTICE (ECJ) RULING OF 2 APRIL 2020 IN CASE C-458-181, THE LUXEMBOURG DIRECT TAX AUTHORITIES ISSUED A CIRCULAR LETTER (CIRCULAR) ON 1 DECEMBER 20202 REGARDING THE NON-APPLICATION OF COUNCIL DIRECTIVE 2011/96/EU OF 30 NOVEMBER 2011 ON THE COMMON SYSTEM OF TAXATION APPLICABLE IN THE CASE OF PARENT COMPANIES AND SUBSIDIARIES OF DIFFERENT MEMBER STATES TO COMPANIES ESTABLISHED IN GIBRALTAR

ON 14 OCTOBER 2020, THE LUXEMBOURG GOVERNMENT FILED BUDGET BILL 7666 WITH THE LUXEMBOURG PARLIAMENT.

NEW AGREEMENT ON THE LEGAL REGIME OF TELEWORKING

WE WOULD LIKE TO REMIND YOU THAT ON 15 FEBRUARY 2021, THE CSSF WILL LAUNCH ITS ANNUAL ONLINE SURVEY ON THE FIGHT AGAINST MONEY LAUNDERING AND TERRORIST FINANCING FOR THE YEAR 2020 (THE “AML/CFT SURVEY”).

ON 12 NOVEMBER 2020, THE COURT OF JUSTICE OF THE EUROPEAN UNION (“CJEU”) GAVE ITS RULING IN THE SONAECOM CASE (C-42/19) WITH RESPECT TO ENTITLEMENT TO DEDUCT THE VAT INCURRED FOR CONSULTANCY SERVICES PROVIDED IN VIEW OF A POTENTIAL SHARE ACQUISITION, AND FOR A BANK COMMISSION ON THE SET-UP OF A BOND LOAN, WHERE NEITHER THE ACQUISITION NOR THE LOAN’S ORIGINAL PURPOSE EVER MATERIALISED.

The 2021 draft Italian budget law provides for new interesting tax measures applicable from 1st of January 2021 that will undoubtedly enhance investments in Italian companies by European investment funds.

IN A POST BREXIT CONTEXT VALIDITY OF INSURANCE CONTRACTS CONCLUDED BY UK INSURANCE UNDERTAKINGS IN A POST-BREXIT CONTEXT – CLARIFICATIONS BY THE LUXEMBOURG LEGISLATOR

PLEASE BE INFORMED THAT THE LUXEMBOURG COMMISSION DE SURVEILLANCE DU SECTEUR FINANCIER (CSSF) HAS DECIDED TO POSTPONE THE APPLICATION OF THE REQUIREMENTS OF THE EUROPEAN SINGLE ELECTRONIC FORMAT (ESEF) TO ANNUAL FINANCIAL REPORTS BY ONE YEAR.

WITH THE END OF THE TRANSITION PERIOD AS OF 1 JANUARY 2021, THE UK OFFICIALLY BECAME A THIRD COUNTRY WITH RESPECT TO THE EU, MEANING THAT THE EU VAT DIRECTIVE HAS CEASED TO APPLY TO IT.

IN VIEW OF THE DEPARTURE OF THE UNITED KINGDOM FROM THE EU ON 1 FEBRUARY 2020 AND THE FORTHCOMING END OF THE TRANSITIONAL PERIOD ON 31 DECEMBER 2020, THE CSSF STATED ITS EXPECTATIONS AND RENDERED SOME CLARIFICATIONS THROUGH A PRESS RELEASE PUBLISHED ON 7 DECEMBER 2020.

LUXEMBOURG COMPETITION COUNCIL IMPOSES HIGHEST EVER FINE ON BAHLSEN AND SUPERMARKET CHAINS CACTUS, AUCHAN AND DELHAIZE FOR RESALE PRICE MAINTENANCE AGREEMENTS.

ON DECEMBER 23, 2020 THE LUXEMBOURG LEGISLATOR HAS PUBLISHED THE LAW OF 19 DECEMBER 2020 IMPLEMENTING FINANCIAL RESTRICTIVE MEASURES (“LAW OF 19 DECEMBER 2020”). THIS LAW HAS REPEALED THE LAW OF 27 OCTOBER 2010 ENHANCING THE ANTI-MONEY LAUNDERING AND COUNTER TERRORIST FINANCING LEGAL FRAMEWORK.

WE ARE PLEASED TO INFORM YOU THAT ARENDT HAS JUST WON TWO MAJOR AWARDS AT THE THE LAWYER EUROPEAN AWARDS 2020: EUROPEAN LAW FIRM OF THE YEAR AND LAW FIRM OF THE YEAR: BENELUX.

WITH A VIEW TO ACCELERATING ITS DIGITALISATION STRATEGY, ARENDT RECENTLY ACQUIRED A MAJORITY SHAREHOLDING IN MOBILU, A LUXEMBOURG COMPANY SPECIALISING IN OPERATIONAL PROCESSES, DIGITALISATION AND ROBOTISED AUTOMATION.

DEVELOPED IN RESPONSE TO THE COVID-19 CRISIS, THE ARENDT INSIGHTS APP BRINGS BUSINESS LAW, TAX AND REGULATORY UPDATES DIRECTLY TO EVERY USER’S SMARTPHONE OR TABLET.

Arendt & Medernach has the pleasure of announcing the appointment of four new Partners.

The leitmotif underpinning the Law is the same as that for the parental leave reform in 2016, namely enabling employees to achieve a greater balance between their private and professional lives.

We would like to kindly remind you that from 7 January 2019 to 28 March 2019, the Financial Conduct Authority ("FCA") online system ‘Connect’ is open for EEA-based firms and fund managers of EEA-domiciled investment funds (UCITS and AIF) currently passported into the UK to notify the FCA about their intention to participate in the temporary permissions regime (“TPR”).

On 5 March 2019 the Luxembourg government filed the new finance bill n° 7450 (“Finance Bill”) with the Luxembourg parliament

On 26 February 2019 the Grand Chamber of the Court of Justice of the European Union (“CJEU”) rendered 2 judgments regarding the non-application of the Parent Subsidiary Directive (Council Directive 90/435/EEC – ”PSD") and the Interest and Royalties Directive (Council Directive 2003/49/EC – “IRD”) in case of fraud or abuse, even in the absence of any domestic anti-abuse legislation.

On 31 January 2019, the bill of law n°7401 (the “Bill”) was issued on measures to be taken in relation to the financial sector in case of the withdrawal of the United Kingdom (“UK”) and North Ireland from the European Union (“EU”) (“Brexit”).

Publication of the Grand-Ducal Regulation of 15 February 2019 on the modalities for registration, payment of the administrative fees and on the access to the information registered with the register of beneficial owners.

On 8 June, the Luxembourg Competition Council exempted an agreement between Benelux Taxis, Inter-Taxis and other tax companies who jointly use the Webtaxi reservation centre for taking bookings from customers

On 19 April 2018, the European Parliament adopted the new directive on the prevention of the use of the financial system for the purposes of money laundering or terrorism financing.

The 5th AML Directive was published in the Official Journal of the European Union on 19 June 2018, and will enter into force 20 days thereafter.

On 31 May 2018, the law on markets in financial instruments (the “2018 Law”) as well as the grand-ducal regulation relating to safeguarding of financial instruments and funds belonging to clients, product governance obligations and the rules applicable to the provision or reception of fees, commissions or any monetary or non-monetary benefits (the “Grand-Ducal Regulation”) were published in the Luxembourg official gazette.

On 15 June 2018 the Luxembourg government approved 2 new bills of law: ATAD Bill and MLI Bill

On 5 July 2018, the Court of Justice of the European Union (“CJEU”) released a welcome decision in the Marle Participations case (C-320/17) concerning the deduction of input VAT by a holding company on costs incurred in relation to acquisitions and sales of shares in subsidiaries.

On 3 July 2018, the OECD launched a consultation on the transfer pricing of financial transactions by publishing the first draft of a new chapter of the OECD Transfer Pricing Guidelines for Tax Administrations and Multinational Enterprises

The bill of law n°7278 implementing the VAT group into Luxembourg law was voted on 26 July 2018 by the Chamber of Deputies.

In Luxembourg, wage indexation is an automatic mechanism for the adjustment of salaries to keep pace with evolving living costs. From 1 August 2018, the index applicable to employees' wages will climb.

Luxembourg, 25 January 2018 - Arendt & Medernach has the pleasure of announcing the appointment of three new Partners.

On 20 March 2018, the governments of France and Luxembourg signed a new double tax treaty (“New Treaty”) replacing the current treaty dated 1 April 1958 (“Old Treaty”). Although the New Treaty is based on the 2017 OECD Model Tax Convention, it contains certain substantial derogations therefrom.

​​Discover Luxembourg's space adventure and the challenges the space industry will face in the next decade. Arendt & Medernach, the leading law firm in Luxembourg, continuously supported the space and satellite industries and have developed the firm’s expertise and experience in these domains. We are now really looking forward to helping other businesses on their journeys into space. Should you require more information, please contact Laurent Schummer, Bob Calmes and Blazej Gladysz.   Click here to see the video: https://youtu.be/sM_EPRLlVcQ

Reducing barriers for cross-border distribution of investment funds within the EU, thus reducing the costs of going cross-border, while deepening the single marketing procedure for investment funds is the proclaimed purpose of the two legislative proposals published by the EU Commission today, on 12 March 2018. According to the EU Commission proposal, the envisaged harmonisation of rules for cross-border distribution should occur through a new directive amending both the UCITS and AIFM Directives with regard to the cross-border distribution of collective investment funds, and through a new regulation on facilitating cross-border distribution of collective investment funds and amending the EuVECA Regulation (Regulation on European venture capital funds) and the EuSEF Regulation (Regulation on European social entrepreneurship funds).

A significant number of so-called Part II UCIs may remain within the scope of the AIFMD depositary regime. Luxembourg’s Parliament (Chambre des Députés) has voted yesterday to amend the respective legislation to this effect. This amendment clarifies the scope of the UCITS-like and the AIFMD depositary regimes in Luxembourg for these funds.

On 14 February 2018, the law of 13 February 2018 implementing a substantial part of the 4th anti-money laundering directive (4th AML Directive) was published in the Official Journal of Luxembourg. The law will enter into force on 18 February 2018.

Through the law of 27 February 2018 implementing the EU regulation (UE) 2015/751 on interchange commissions for card based payments, which amends various laws relating to the financial sector (and was published in the Luxembourg official gazette on March 1st 2018), the Luxembourg parliament has now relaxed the rules on professional secrecy for banks, investment firms, other regulated professionals of the financial sector, payment institutions, electronic money institutions and insurance undertakings (together the « financial institutions ») to facilitate outsourcing arrangements.

Earlier this week, the European Supervisory Authorities (ESAs) published draft amendments to EMIR-related regulatory technical standards (RTS) that align the treatment of variation margin (VM) for FX forwards with the supervisory guidance applicable in other key jurisdictions. More specifically the draft amendments propose that the requirement to exchange VM for physically settled FX forwards shall only target transactions between institutions (credit institutions and investment firms).

Regulation (EU) 2017/1991 amending regulations (EU) No 345/2013 on European Venture Capital Funds (EuVECAs) and (EU) No 346/2013 on European Social Entrepreneurship Funds (EuSEFs) (together, the “Regulations”) has been published today in the Official Journal of the European Union and will be applicable as of 1 March 2018.

With less than 30 days to go before the new MiFID II regime will be rolled out, funds and management companies/AIFM are increasingly concerned as to how they will be impacted: product governance inducements and payment for research increased client information requirements  complex and non-complex products classification

The draft laws implementing AMLD 4 set out strict rules to allow for protection against improper access to the information on BOs.

Earlier this week, the European Supervisory Authorities (ESAs) published draft amendments to EMIR-related regulatory technical standards (RTS) that align the treatment of variation margin (VM) for FX forwards with the supervisory guidance applicable in other key jurisdictions. More specifically the draft amendments propose that the requirement to exchange VM for physically settled FX forwards shall only target transactions between institutions (credit institutions and investment firms).

​As announced by the Luxembourg Finance Minister in his presentation of the 2018 budget bill, the government introduced certain amendments to the current tax regime of stock option plans. In particular, the valuation of freely negotiable options will be increased as of 1 January 2018 from 17.5% to 30% of the value of the underlying stock.

We would like to draw your attention to the release of an official coordinated version of the amended law of 10 August 1915 on commercial companies. The law of 10 August 1915 has been entirely renumbered and the table of contents has also been reordered. The new version does not contain any substantial change. The new numbering is applicable as from 19 December 2017.

2017 was a busy year, not least in respect of legal and regulatory changes that may impact your business. We are pleased to provide you with an overview of the major legal and regulatory developments under Luxembourg and EU law.

In less than 4 months the Priips-Kid regulation will come into force. The exercise of ensuring compliance with this regulation is not an easy one. - What should the Kid include? - What are the key questions to ask before building your Kid? - What are the actions to take before building your Kid?

Court decision in Bărbulescu v. Romania On 5 September 2017, the Grand Chamber of the European Court of Human Rights (the “ECHR”) examined for the first time the issue of the monitoring of electronic communications of an employee by a private employer, within the framework of an action brought by Mr Bărbulescu, an engineer employed by a private company in Romania. Mr Bărbulescu had been dismissed for using for personal purposes, in breach of the provisions of the internal regulations of the company, a professional Yahoo Messenger account created at his employer’s request for the purpose of responding to customers’ enquiries.

On 11 October 2017, and the last time before next year’s parliamentary elections, the current Luxembourg Finance Minister presented the budget law for 2018 to the Parliament (Chambre des Députés). The main tax-related provisions of the Bill of Law N° 7200 (“Bill”) as laid out below in more detail include inter alia:

On 9 July the United Arab Emirates (UAE) Ministry of Finance (MOF) published an update of the Value Added Tax (VAT) FAQ section of its website.     

On 31 July 2017, the President of the United Arab Emirates (the “UAE”) issued the new Tax Procedures Law (the “Law”). This Law contributes to build the UAE’s tax system, to regulate the administration and collection of taxes and most importantly, to clarify the respective rights and obligations between the Federal Tax Authority (the “FTA”) and the taxpayer.

Following the Luxembourg case C-274/15, the series of cases relating to the scope of the cost-sharing VAT exemption also referred to as “Independent Group of Persons” (“IGP”) continues with the release today of three judgements by the Court of Justice of the EU (“CJUE”): Aviva (C-605/15), DNB Banka (C-326/15) and European Commission v Federal Republic of Germany (C-616/15).

The Luxembourg law on the exploration and use of space resources of 20 July 2017 entered into force on 2 August 2017 and placed Luxembourg among the most innovative space-oriented nations in the world.

On 27 August 2017, the United Arab Emirates (the "UAE") published the text of its domestic Value Added Tax (the "VAT") Law, shortly after releasing the text of its Excise Tax Law last week, and the Federal Tax Procedures Law earlier this month. It will be followed by implementing regulations, which will provide more detail on application of the VAT Law.

As Luxembourg is gaining increasing success in international mobility and business immigration, the applicable legal framework has been recently adapted by introducing several new categories of residence permits in Luxembourg, including a residence permit for investors.

A revision of the Posting Directive became necessary after it proved that the Posting Directive contained numerous pitfalls in the past. In some cases it turned out that companies posting employees were only “letterbox companies” without any substance. In other cases, situations where concerned employees’ rights were being circumvented were unveiled.

Arendt & Medernach is delighted to announce that as of September, Eric Fort will succeed Bob Calmes as head of our New York office. Having successfully worked with institutional and private clients operating in Luxembourg, Eric brings a wealth of experience to the US office where our aim is to continue to provide tailored advice for our clients in this market.

On 31 July 2017, the President of the United Arab Emirates (the “UAE”) issued the new Tax Procedures Law (the “Law”). This Law contributes to build the UAE’s tax system, to regulate the administration and collection of taxes and most importantly, to clarify the respective rights and obligations between the Federal Tax Authority (the “FTA”) and the taxpayer.

​ On 10 August 2017 the Luxembourg Stock Exchange announced that all domestic and foreign issuers operating on the regulated market (Bourse de Luxembourg) or on the multilateral trading facility (Euro MTF) of the Luxembourg Stock Exchange must provide their legal entity identifier (“LEI”) codes to the Luxembourg Stock Exchange before 15 September 2017.

The Luxembourg law on the exploration and use of space resources of 20 July 2017 entered into force on 2 August 2017 and placed Luxembourg among the most innovative space-oriented nations in the world.

On 9 July the United Arab Emirates (UAE) Ministry of Finance (MOF) published an update of the Value Added Tax (VAT) FAQ section of its website.

The pieces of the puzzle are finally falling into place. The long-awaited level 3 and 4 measures have been published earlier this week, half a year before the PRIIPs KID becomes compulsory.

Amongst the numerous topics covered by the Markets in Financial Instruments Directive II (MiFID II), the European Securities and Markets Authority (ESMA) has decided to provide further guidance on the requirements regarding product governance through its guidelines dated 2 June 2017 which focus on the target market assessment by manufacturers and distributors of financial products.     

The partners of Arendt & Medernach are pleased to announce that their firm has been awarded once again the prestigious “Luxembourg Tax Firm of the Year” title during the International Tax Review’s European Tax Awards ceremony held at the Savoy Hotel in London on 18 May.

On 7 June 2017, the official ceremony for the signing of the multilateral instrument (“MLI”) took place bringing to a close a process initiated last year when a consensus was reached on the wording of the MLI on 24 November 2016 (see also our newsflash dated 2 December 2016, available on our website www.arendt.com section Publications/Newsflash).

Luxembourg, May 2017 – Arendt & Medernach is proud to have been named “Luxembourg Law firm of the year” both by Chambers & Partners and IFLR (International Financial Law Review). The prestigious trophies were both received in April in London at the respective ceremonies of the Chambers Europe Awards 2017 and the IFLR European Awards 2017.

The question of the scope of the cost-sharing VAT exemption, also referred to in the Council Directive 2006/112/EC of 28 November 2006 as amended ("EU VAT Directive") as “Independent Groups of Persons” or “IGPs”, is currently being debated at the Court of Justice of the EU (“CJEU”) in several cases. Last Thursday marked the first milestone regarding this specific VAT exemption since the CJEU released its judgment in the case Commission v Luxembourg (C-274/15). This case law is important as it will open a new area in the field of cost-sharing arrangements and a new discussion on the concept of VAT grouping. ​With the decision confirming that Luxembourg has failed to fulfil its obligations, the Luxembourg IGP regime will have to comply with the judgement without delay.   Please click on this link to read the full tax update. 

Luxembourg, May 2017 – Arendt & Medernach is proud to have been named “Luxembourg Law firm of the year” both by Chambers & Partners and IFLR (International Financial Law Review). The prestigious trophies were both received in April in London at the respective ceremonies of the Chambers Europe Awards 2017 and the IFLR European Awards 2017.

30/12/2016 The year 2017 will kick off with three major changes involving sizeable consequences for both employers and employees: wage indexation (l), an increase of the minimum social wage (II) and a reform of the organisation of working hours (III).

29/12/2016 ​On 13 December 2016, to ensure compliance with the BEPS Action Plan, the Luxembourg Parliament adopted bill of law No. 7031 (CBCR Law) implementing Council Directive (EU) 2016/881 of 25 May 2016 (DAC IV) as regards mandatory automatic exchange of information in the field of taxation and introducing new reporting obligations for multinational companies. Based on the information attached, you should be able to assess the impact of the new legislation on your group companies by:

28/12/2016 On 27 December 2016 the Luxembourg Tax Authorities (Administration des contributions directes) issued Circular Letter L.I.R. – N° 56/1 – 56bis/1 (the “New Circular Letter”) on the tax treatment of companies engaged in intra-group financing transactions.

20/12/2016 ​2016 was a turbulent and busy year, not least in respect of legal and regulatory changes that may impact your business. We are pleased to provide you with an overview of the major legal and regulatory developments under Luxembourg and EU law.

15/12/2016 The law of 12 December 2016 (the “Law”) has introduced a new legal framework for companies having a social or societal impact: the société d’impact sociétal (the “SIS”).

15/12/2016 The law of 12 December 2016 (the “Law”) has introduced a new legal framework for companies having a social or societal impact: the société d’impact sociétal (the “SIS”).

13/12/2016 Today, the Luxembourg Parliament enacted the law (the “New Market Abuse Law”) implementing Directive 2014/57/EU of the European Parliament and of the Council of 16 April 2014 on criminal sanctions for market abuse (market abuse directive), also known as the “Market Abuse Criminal Sanctions Directive” (“Directive 2014/57/EU”) and Commission Implementing Directive (EU) 2015/2392 of 17 December 2015 on Regulation (EU) No 596/2014 of the European Parliament and of the Council as regards reporting to competent authorities of actual or potential infringements of that Regulation (“Directive (EU) 2015/2392”). With the transposition of Directive 2014/57/EU and Directive (EU) 2015/2392, Luxembourg has ensured the effective implementation of the new market abuse regime deriving from Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (the “Market Abuse Regulation”) and its related implementing and delegated regulations, which had already entered into force on 3 July 2016.

2/12/2016 On 24 November 2016, the Organisation for Economic Cooperation and Development (“OECD”) adopted the multilateral convention composed of the multilateral instrument (“MLI”) and explanatory statements (“ES”). The implementation of the MLI could result in significant changes to the bilateral tax treaties concluded by Luxembourg and may affect amongst other the tax treaty access of tax transparent entities. Unfortunately the MLI does not address the tax treaty access of collective investment funds and uncertainty remains in this respect.