In this Blog article called “The Challenges – Part I”, I will publish my views on the transition between the old and the new IP tax regime, and the IP which will no longer qualify under the new regime as well as some planning opportunities with regard to such IP.
Indeed, the so-called “grandfathered” IP will continue to benefit from the old IP tax regime in Luxembourg until 30 June 2021.
As expected under the Nexus Approach, IP like trademarks, domain names and similar rights will no longer qualify as “eligible assets”. The new definition is by far more restrictive than the old definition and refers to “inventions” and “software” if protected under the corresponding national or international rules.
What to do?
- Surely not over-react! The “grandfathering” continues up to 30 June 2021.
- As the new IP regime starts 1.1.2018, it is possible to acquire (or develop) additional IP in an existing company. It is advisable, not to add IP benefitting from the new rules with “grandfathered” IP. Indeed, the old and the new rules do exclude each other, so that either the old rules can be applied, or the new rules (please keep in mind, some old IP may not benefit from the new rules!).
Please refer to our newsflash for more technical information, keeping in mind, that only a first draft of the new law is currently available.