New legislation and regulations

09 Feb 2016

New legislation and regulations

Laurence Savelli, Lorraine Chéry

Taxation of stock option plans

The circular L.I.R 104/2 bis from the Tax Director of 28 December 2015 provides that employers intending to offer its employees a stock option plan (as intended by the circular L.I.R. No. 104/2 of 20 December 2012), should:

  • inform the officer of the RTS Tax office authorised for monitoring businesses at least 2 months prior to implementing the plan,
  • attach a copy of the plan, as well as the list of beneficiary employees.

The circular applies to all stock-option plans set up from 1 January 2016.

Employees must likewise inform the authorised officer of the RTS Tax office as soon as possible of the stock-option plans set up prior to 1 January 2016 if the options have not yet been allocated to the wages.

Circular L.I.R 104/2 bis, tax regime of stock option plans.

Recovery, resolution and winding up of credit institutions and certain investment firms

The law of 18 December 2015 on measures for the recovery, resolution and winding up of credit institutions and certain investment firms and on deposit guarantee schemes and compensation schemes for investors was published in Mémorial A - No. 246 of 24 December 2015. The law in particular defines the rights and duties of the Resolution Council (represented by the CSSF) in relations with employees in the case of recovery, resolution and winding up of credit institutions and investment firms. The law furthermore provides that:

  • The resolution council must consult the representatives staff and the employer in terms of the impact of a resolution plan on the staff of the institution;
  • The measures taken by the administrator or liquidator in the territory of the Grand Duchy of Luxembourg should be in accordance with the law of Luxembourg, in particular regarding employees’ information;
  • The effects of suspension of payment or the liquidation of employment contracts and employment relations are governed by the law of the State applicable to the employment contract.

Law of 18 December 2015, pursuant to the resolution, consolidation and liquidation of lending institutions and certain investment companies

Luxembourg-France tax treaty

The conditions required for the entry into force of the Fourth Addendum to the Franco-Luxembourgian Treaty pursuant to avoiding double taxation and to establishing of reciprocal administrative assistance regarding taxes on income, approved by the law of 7 December 2015 (Mémorial 2015, A, no. 232, p. 5038 and et seq.) were fulfilled on 14 January 2016. The Fourth Addendum has thus entered into force in respect of France and Luxembourg on 1 February 2016.

The provisions of the Fourth Addendum shall be applicable after the current calendar year in which the Addendum entered into force, this being 1 January 2017.

Mémorial A No. 6 of 22 January 2016