Tax Neutral or Caught in the Net? The World of Luxembourg Securitization Vehicles

Volume 12 No 3    /    Read Article

By James T. O’Neal and Naima Bouzago Ouali (Guest Authors)

The Luxembourg securitization vehicle (“Lux S.V.”), governed by the Securitization Law of 22 March 2004 remains a core pillar in structured finance and asset repackaging across Europe. As Luxembourg continues to implement E.U. directives such as A.T.A.D. I & II, D.A.C.6., and the O.E.C.D.’s B.E.P.S. action plan – Including Pillar Two and substance-driven anti-abuse frameworks – Lux S.V.’s face growing scrutiny. In their article, James T. O’Neal, Co-head of Maples and Calder (Luxembourg)‘s Tax Team, and Naima Bouzago Ouali, an Associate in Maples and Calder (Luxembourg)’s Tax Team, analyze how A.T.A.D. I & II’s Hybrid Mismatch Rules and A.T.A.D. I’s Interest Limitation Rules can be successfully navigated in the appropriate set of facts, thereby preserving their tax neutrality. Hybrid mismatch rules, investor payment tax treatment, and interest limitation rules that include the single company worldwide group exception are addressed.   See more →