The deadline for reporting obligations in relation to the Luxembourg real estate levy is approaching. All entities in scope are concerned, whether or not they hold Luxembourg real estate.

Background

A 20% real estate levy was introduced by the Luxembourg law of 19 December 2020, applying as from 1 January 2021 to income and gains from Luxembourg real estate derived directly or through tax transparent entities by certain tax opaque investment vehicles, namely:

• undertakings for collective investment (UCIs) falling under Part II of the law of 17 December 2010, as amended;
• specialized investment funds (SIFs) subject to the law of 13 February 2007, as amended; and
• reserved alternative investment funds (RAIFs) defined in article 1 of the law of 23 July 2016, as amended.

Reporting obligations

Such entities should, to the extent they have derived income from Luxembourg real estate directly or through tax transparent entities during fiscal year 2021, file a real estate levy return at the latest on 31 May 2022. The levy should be paid to the tax authorities at the latest on 10 June 2022.

Irrespective of whether or not they hold Luxembourg real estate or derive income therefrom, concerned entities should file a one-time notification at the latest on 31 May 2022, confirming:

• whether or not they have held (directly or through tax transparent entities) Luxembourg real estate at any point of time during 2020 and 2021; and
• as the case may be, that they changed their legal form from a tax opaque to a tax transparent entity at any point of time during 2020 and 2021, to the extent the concerned entity held at least one Luxembourg real estate asset upon the change of its legal form.

However, for entities subject to the real estate levy, this one-time notification obligation will be considered as fulfilled by the filing of a real estate levy return for fiscal year 2021 at the latest on 31 May 2022.

Non-compliance with this one-time notification within the prescribed deadline may trigger a fine of EUR10,000.

Next steps

We recommend to assess whether or not a real estate levy return or one-time notification shall be submitted and, as the case may be, to ensure that the reporting obligations are timely complied with.