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Luxembourg report Luxembourg report
by Euro Reporter
2012-05-30 08:04:08
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Luxembourg withdraw funds over David Haye and Dereck Chisora fight

Luxembourg's sports minister has stripped the country's boxing federation of government subsidies after it chose to sanction the proposed heavyweight contest between the unlicensed British fighters David Haye and Dereck Chisora in London in July. Haye and Chisora were involved in a brawl at a news conference following the latter's defeat by Vitali Klitschko, the World Boxing Council title holder, in February.

Chisora had his licence withdrawn by the British Boxing Board of Control while the former world champion Haye relinquished his when announcing his retirement in October following his defeat to Wladimir Klitschko last July. The Zimbabwe-born Chisora was also banned indefinitely by the World Boxing Council. Luxembourg's boxing federation agreed to sanction the fight at West Ham United's Upton Park on 14 July – a move condemned by the BBBC. "The minister was not amused by this initiative," an official at the ministry said on Thursday. "This does nothing to further the value of sport or the image of Luxembourg in general."

The official said the subsidies were some €3,000‑€4,000 per year and acknowledged that they would not make a huge difference to the sporting body. "The gesture is more symbolic," he said. The BBBC said this month that anyone involved in the proposed fight would be stripped of their licence. The Luxembourg Boxing Federation has agreed to give both fighters licences and is set to receive Haye for a medical test, which Chisora has already passed. "Chisora had his licence withdrawn, but he hasn't been suspended so he is entitled to seek a licence elsewhere," said Toni Tiberi, the boxing federation's secretary-general. He added that the pair were far from the only boxers to have misbehaved. "You saw incidents with Frazier and Foreman. Tyson bit an ear and was still allowed to box. This fight will be a real match and not one just put on for show."

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iTunes in Luxembourg

“How Apple Sidesteps Millions in Taxes” (“The iEconomy Series,” front page, April 29) suggests that Luxembourg-based iTunes S.à.r.l. is part of a grand scheme run by Apple to deprive the United States and European governments of billions of income tax dollars or Euros. You assert that Luxembourg “has promised to tax the payments collected by Apple and numerous other tech corporations at low rates if they route transactions through Luxembourg.”

In the European Union, every iTunes customer, or customer of any other Luxembourg-based business to consumer e-service provider, pays value-added tax (VAT) — a consumption tax similar to the United States sales tax — at the same, lowest possible rate. This is not the result of these e-service providers’ intent to cheat the taxman. Rather, it is the consequence of a combination of these factors: European indirect tax law applicable to cross-border business-to-consumer transactions in e-services. A well-functioning E.U. internal market, which allows for cross-border trade of all e-services from a single location to all other 26 national markets. The lowest tax rate in the applicable 15 to 25 percent range for standard VAT rates in the 27 European Union member states. So, iTunes S.à.r.l. collects 15 eurocents for every euro spent on iTunes services in VAT from each and every customer, wherever he or she is in the European Union.

Luxembourg and iTunes S.à.r.l. simply apply prevailing E.U. tax law in a well-functioning Internet-based E.U. single market.

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Luxembourg aims to be first to fulfil AIFMD

Luxembourg aims to implement the alternative investment fund managers (AIFM) directive by the end of the year, in an effort to have a first-mover advantage over other fund domiciles. The Grand Duchy is setting out to become the first EU member state to transpose the directive, a move it hopes will help it replicate the success it has enjoyed with Ucits. Speaking last week at a London conference organised by Luxembourg fund association Alfi, Luc Frieden, Luxembourg’s minister of finance, told delegates that “the implementation of AIFMD [was] imminent”.

Mr Frieden says draft legislation will be delivered to the Luxembourg parliament by the end of June, with the aim of having the directive fully implemented into national law by the end of 2012. “We expect it to be passed by the Luxembourg parliament by the end of the year,” says Mr Frieden. Jacques Elvinger, a partner at Luxembourg law firm Elvinger, Hoss & Prussen, says that, as with Ucits, “there has always been an advantage to be the first to transpose”. Mr. Elvinger says: “Transposing the directive quickly will enable us to inform all the actors in the industry what the legislation will look like and how they can apply it by the given deadlines. “If implemented by the end of this year, it will give the industry around six months to fully comply. It is important all participants have time to understand how to comply.”

In addition to implementing the AIFM directive early, Luxembourg is also planning to adopt a “legal package” separate from the directive. Mr. Frieden says: “In order to exploit the full potential of the directive, we have added a number of provisions to facilitate and frame the development of the alternative industry as a whole.” Certain tax provisions will be included along with reforms to Luxembourg’s company law, which will aim to make it easier for alternative managers to set up shop in the Grand Duchy. Non-alternative investment funds or those that fall out of the directive’s scope will also be able to use a limited partnership structure as another investment vehicle.

 


      
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