International Accounting Standards
The IRE has set up its own international working group called
"IFRS/implications fiscales" and has published a major opinion
identifying areas where the implementation of IAS/IFRS rules would
have great impact on the determination of the taxable profit. These
areas are listed as follows: first application of IAS rules +
correcting errors + change of accounting rules, leasing, merger,
operations of asset swaps, neutralization of capital gains,
readjustments of valuations, dealings in own shares, hybrid
financial instruments, derivative financial instruments,
participations in subsidiaries, affiliated companies and joint
ventures, specific amortizations. The IRE has drafted solutions for
each of these areas which should allow to move towards taxation
neutrality and to thus avoid unnecessary complexity.
The Administration des Contributions Directes, the Luxembourg Tax
Administration for income tax, also has created its inhouse working
group and thoroughly stresses the view that taxation incidences will
be virtually nil if and when companies depending of a consolidating
parent set up their individual annual accounts according to the
accounting principles presently applied in Luxembourg regulation.
Practical consequences of present IAS rules: Due to what has been
previously outlined, Luxembourg certainly accepts the compulsory
scope of IAS rules prescribed by the EU to be applied to
consolidated accounts of listed companies as of 2005 at the latest.
