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Exemption of risk management services from value-added tax (VAT)

It is stated therein that risk management services are part of the management of such Investment Funds within the meaning of Article 44, 1, d) of Luxembourg's value-added tax (VAT) legislation. In principle, risk management services which are provided by a Management Company are consequently exempt from value-added tax (VAT).

In Luxembourg, the value-added tax (VAT) exemption is now of equal application to the management of Alternative Investment Funds following the recent implementation of the Alternative Investment Fund Managers Directive (AIFM Directive).

The said value-added tax (VAT) exemption applies to management services which have been outsourced provided that when viewed as a whole, such services form a distinct whole as well as being specific and essential for the management of the said Funds. In contrast thereto, purely material or technical services do not come within the scope of this exemption provision.


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