Spain opens the door to Luxembourg SIF
2 Apr. 2014
The Spanish General Directorate of Taxes, through recently published binding ruling, has declared that controlled foreign corporation tax regime (CFC) does not apply to Luxembourg Specialized Investment Funds (SIF) set up for valid economical reasons undertaking business activities fully and effectively in Luxembourg. CFC regime presumes that income from passive investment obtained by corporations resident in low-tax or no-tax jurisdictions will be attributed to the Spanish residents shareholders as if they would have directly obtained the income.
The SIF is subject to an annual tax in Luxembourg amounting to the 0,01% of the quarterly value of its net assets (Spanish SICAV is taxed at 1% of the profit).