New Luxembourg Tax Circular L.I.R. n° 168quater/2
Clarifications about Collective Investment Vehicles (CIV) under reverse hybrid rules
On 12 August 2025, the Luxembourg tax authorities issued Circular L.I.R. n° 168quater/2, providing important guidance on the interpretation of article 168quater, paragraph 2 L.I.R.
According to the circular:
- UCIs, SIFs and RAIFs are now explicitly recognised as Collective Investment Vehicles (CIVs). Their status is presumed by law, meaning they are not required to demonstrate that they are widely held, diversified, and subject to investor protection.
- Other non-regulated funds such as AIFs may also qualify for the CIV carve-out, provided they meet three clarified conditions:
- Broad investor participation (a wide range of unrelated investors),
- Diversified portfolio of securities, and
- Investor protection through CSSF supervision or compliance with AIFMD requirements.
New Luxembourg Tax Circular L.I.R. n° 168quater/2
Clarifications about Collective Investment Vehicles (CIV) under reverse hybrid rules
On 12 August 2025, the Luxembourg tax authorities issued Circular L.I.R. n° 168quater/2, providing important guidance on the interpretation of article 168quater, paragraph 2 L.I.R.
According to the circular:
- UCIs, SIFs and RAIFs are now explicitly recognised as Collective Investment Vehicles (CIVs). Their status is presumed by law, meaning they are not required to demonstrate that they are widely held, diversified, and subject to investor protection.
- Other non-regulated funds such as AIFs may also qualify for the CIV carve-out, provided they meet three clarified conditions:
- Broad investor participation (a wide range of unrelated investors),
- Diversified portfolio of securities, and
- Investor protection through CSSF supervision or compliance with AIFMD requirements.
