- pe/re funds th september 2018 - deloitte united states · • circular iml 91/75 • gd...

Link ‘n’ Learn 2018 - PE/RE Funds13th September 2018

2© 2018 Deloitte

Getting Started

AgendaHere with you today

What’s happening in Lux:• Trends and figures

1

Luxembourg PE/RE regulatory framework:• Fund manager regulation vs product regulation• Product regimes (SIF, SICAR, RAIF, etc)• AIFM news from Lux • Key operation topics

2

Luxembourg tax topics• Vehicle taxation regimes• BEPS and SPV structuring• Fund manager taxation and Transfer pricing from a

Luxembourg standpoint

3

Gérard Lorent

Director,

Investment Management,

Luxembourg

Arnaud Bon

Director,

Investment Management,

Luxembourg

Enrique Marchesi

Director,

Tax ,

Luxembourg

Christophe Masset

Partner,

Tax

Luxembourg

3Confidential 3© 2018 Deloitte

Luxembourg PE/RE Industry Landscape

4© 2018 Deloitte

Luxembourg Real Estate fund managers trendsLuxembourg as the place to be in the current regulatory and tax environment

BEPS

BREXIT

AIFMD

External Drivers…… directly impact PE/RE

Houses…… as market data evidences

Driving large PE/RE Houses to

Luxembourg in order to benefit from

stability and pan-European

marketing passport through:

• AIFM set-up

• AIF set-up, either as master funds

or parallel funds

Requirement of substance within,

and motive for, RE Houses’

Luxembourg based operations

Operational

Efficiency

Re-thinking of back and middle

office functions and look-out for new

solutions to ensure quality and cost

effectiveness

AIF set-up in Luxembourg

AIFMs set-up in Luxembourg

Luxembourg as asset management platform

Fundtoolbox

Cost

Operations

Tax neutrality & benefits

Carried interest

.. which adapt their operating model…

• Wide array of flexible investment vehicles• Leveraging existing operations• Optimal split between internally managed

functions and outsourced tasks• Existence of skilled operational / back-office

focused workforce• Tax efficiency of Luxembourg investment vehicles• Structuring of management company /

management fees & carried interest

Number of Limited PartnershipsJune 2014 – June 2017

Blackstone

Expanding the finance,

accounting and risk

and compliance team

in Luxembourg

FT

Carlyle

Increasing operations and

substance in Luxembourg

to get “passporting”

rights

FT

EQT

One hub for

domiciliation

of funds in

Luxembourg

EQT

M&G

M&G Investments

choses

Luxembourg

before Brexit

Paperjam


Luxembourg PE/RE Regulatory environment

6© 2018 Deloitte

The European alternative investment fund galaxy

EU level Luxembourg level

AIFM

• Directive 2011/61/EU

• Regulation No 694/2014 of 17 December 2013

• Regulation No 448/2013 of 15 May 2013

• Regulation No 447/2013

• Regulation (EU) No 231/2013

• ESMA/2014/869EN

• ESMA/2013/1339

• ESMA/2013/998

• ESMA/2013/611

• ESMA/2013/232

UCI

• Law of 17 December 2010

• CSSF Circular 14/591








• Circular IML 91/75

• GD Regulation of 14 April 2003

Transversal

• GD Regulation of 28 October 2013

• CSSF Regulation No. 16-07







• IML 98/143




SICAR

• Law of 15 June 2004




RAIF

• Law of 23 July 2016

SIF

• Law of 13 February 2007

• GD Regulation of 27 February 2007



AIFM

• Amended Law of 12 July 2013




• CSSF Regulation No 15-03

EU vehicles

• Regulation (EU) 2017/1991



• Regulation (EU) 2015/760

7© 2018 Deloitte

Navigating complexity

How to select the appropriate manager’s and vehicle’s regimes?

EU

Fund Manager regime

• AIFMD

• Light/full regime

• Special EU product regime (EUVCA, EUSEF, ELTIF)

Lux

Product Regime

• SIF

• SICAR

• RAIF

• None

Lux Legal Form

• SCSp (LP), SCA, SCS

• SA, Sarl

• FCP

Regime Considerations



Applies to Fund Managers

Applies to Fund

Applies to Fund

8© 2018 Deloitte

Summary of possible Luxembourg combinations for PE/RE

Lux non regulated Vehicles

Lux semi-regulated VehiclesLux Regulated Vehicles

AIFM Regime

Out of AIFMD scope

Light AIFMD Regime

Full AIFMD Regime

SIF SICAR RAIF

Product Regime

FCP

SCA, SA, SARL

SCS, SCSp

N/A

SCA, SA, SARL

SCS, SCSp

N/A

SCA, SA, SARL

SCS, SCSp

SCA, SA, SARL

SCS, SCSp

FCP

SCA, SA, SARL

SCS, SCSp

FCP

SCA, SA, SARL

SCS, SCSp

SCA, SA, SARL

SCS, SCSp

SCA, SA, SARL

SCS, SCSp

SCA, SA, SARL

SCS, SCSp

FCP

SCA, SA, SARL

SCS, SCSp

ELTIF

* Legal form options similar to options available to Luxembourg Product Regime

EuVCA / EuSEF

9© 2018 Deloitte

AIFMD regime criteria

AIF qualification

Thresholds

Opt-in

1

2

3

EU Regulatory

regime

Lux Regulatory

Regime

LuxLegal form

• Investment policy• Fund raising • Not UCITS• No exemption

• 500 Millions € (close ended, no leverage)• 100 Millions € (all others)

• Marketing purposes• Target Operating Model

10© 2018 Deloitte

What distribution regime for the fund manager?

Pros Cons+ -

• No regulated structure• Time to «market»• No depositary agent required• Light regulatory reporting obligations

• Possibility to distribute to Professional Investors upon notification of domestic regulator

• Market recognition

• Need for an AIFMD-licensed fund manager• Time to market• Depositary agent required• Regulatory reporting obligations

• National Private Placement Regime (NPPR) not accepted in all jurisdictions and stronger enforcement of rules in other jurisdictions

• NPPR to be abolished by 2018• Reverse Solicitation difficult to use practically

AIFMD light regime

Private placement / Reverse solicitation

AIFMD full regime

EU AIFMD passport

2

ELTIF Possibility to market to retail investors Specific investment / leverage restrictions

EU Regulatory

regime

Lux Regulatory

Regime

LuxLegal form

1

11© 2018 Deloitte

Luxembourg regulatory regime selection criteria

EU Regulatory

regime

Lux Regulatory

Regime

LuxLegal form

Time-to-market

1

Regulated product / LP comfort

2

Investment eligibility

3

Legal flexibility:• Share capital variability• Compartment

4

Tax Regime

5

12© 2018 Deloitte

What Luxembourg national regime for the investment vehicle?

• Recognized regulated investment vehicle• Variable share capital• Possibility to create sub-funds• Low subscription tax (1 bps of NAV)

SIF

SpecialisedInvestment Fund

SICAR

Investment Company in Risk Capital

RAIF

Restricted Alternative Investment Fund

Unregulated entity

• Recognized regulated investment vehicle• Variable share capital• Possibility to create compartments• No diversification requirement• Fully taxable but exempt for risk capital investments

• No diversification requirement / diversification requirement• Time to market – no CSSF approval• Taxation regime: SIF or SICAR-like regimes

• No diversification requirement• No asset eligibility rules• Time to market – no CSSF approval• Choice between DTT eligibility or tax transparency

• Time to market – need a prior approval from the CSSF• Diversification requirement (max. 30% of the NAV, i.e.

min. of 4 investments) but ramp-up period permitted• Cannot benefit from all DTTs in place

• Time to market – need to obtain prior approval from the CSSF

• Asset eligibility rules – Only risk capital assets• Cannot benefit from all DTTs in place

• New type of vehicle• Requires the appointment of a fully authorized AIFM• Asset eligibility and diversification rules• Cannot benefit from all DTTs in place

• No variable share capital – however, possibility to use alternative flexible mechanisms

• No compartments

Pros Cons+ -

EU Regulatory

regime

Lux Regulatory

Regime

LuxLegal form

1

2

3

4

13© 2018 Deloitte

Legal form selection criteria

Lux Regulatory

Regime

LuxLegal form

EU Regulatory

regime

Possibility offered by regime

1

LP comfort

2

Legal flexibility:• Share capital variability• Investors rights

3

Publication obligations

4

Tax Regime:• Corporate structure taxation• Special regime taxation• Tax transparency

5

14© 2018 Deloitte

Represented by units / LP interestsVariable

Yes

Yes

Yes

No

General partner

Cannot be removed without cause

General partner


General partner


What legal form for the investment vehicle?

Management Legal

personalityShare capital Distribution rules Taxation Reporting obligations

• Publication of articles of incorporation

• Publication of annual financial statements



• No publication of LPA

• No publication of annual financial statements



Fully taxable entity, special regime / exemptions possible (SOAPRFI / SIF / SICAR)

Fully taxable entity, special regime / exemptions possible (SOAPRFI / SIF / SICAR)

• Taxable transparent entity

• Tax transparent entity

• Profit allocation rules possible

• Need for distributable profit, unless SIF/SICAR/RAIF


• Need for distributable profit, unless SIF/SICAR/RAIF


• No need for distributable profit


• No need for distributable profit

• Represented by units

• Variable

• Represented by shares

• Variable upon board decision only if SICAR/SIF

• Represented by shares

• Variable upon board decision only if SICAR/SIF

Board of directorsCan be removed without cause

Limited liability company

Société anonyme

Corporate partnership limited by shares

Société encommandite par actions

Corporate parternshiplimited by units

Société encommandite simple

3

Limited partnership

Société encommandite spéciale

4

Lux Regulatory

Regime

LuxLegal form

EU Regulatory

regime

1

2


Entities supervised by the CSSF

Depository

Central Admin. (FA & TA)

Lawyer

Tax advisor Auditor

Domiciliary Agent M & A advisors

General Partner

New co CNew co A New co B

Target CTarget BTarget A

Property managers

Independent appraiser

Limited Partners

Service providers of the structure appointed by the fund

• Makes investment decisions for the fund

• Usually contributes to the fund

• Receives carried interest

Disposal proceeds, interests and dividends

Invest via Equity and debt Appoints

Corporate accountants

Property accountants

Luxembourg PE/RE funds set-upGeneral overview of main stakeholders

Fund Manager

Specific to Real Estate

AIF

AIFM

Appoints

Appoints

16© 2018 Deloitte

Main topics of consideration when designing a PE/RE AIFM target operating modelsDesigning an AIFM operating model shall be based on AIFMD as well as group constraints

Co

re

Front office

Middle office

Back office

Support

AIFM

Valuation Reporting & Disclosure

Distribution / Marketing

Risk ManagementPortfolio

Management

Internal Audit

Investment Compliance

InvestorCompliance

Fund Accounting & Reporting

Transfer Agent

IT TaxLegal

No

n C

ore

• Risk Management or Portfolio Management functions (“Core functions”) may be delegated to eligible counterparties

• Only one of the core functions may be delegated and critical mass of activities must be in AIFM (“51% rule”)

• Compulsory oversight framework to be implemented in relation to delegated functions

• All other functions (referred to as non-core Functions) may be delegated

• Sufficient infrastructure and support functions are still required

• Delegation shall be fully justified

• Oversight framework to be implemented in relation to delegated and critical functions

• Notions of delegation and outsourcing should be distinguished as:

Delegation of a function refers both to its responsibility and its execution, and hence implies delegation of responsibility within an adequate delegation oversight framework

Outsourcing refers to the simple execution of tasks by a third party under the full responsibility of the outsourcer

• Non-core support functions may be delegated/outsourced as long as the AIFM has sufficient infrastructure and support functions in place and such delegation:

Allows the AIFM to properly operate, and

Does not deprive the AIFM of any substance and decision ability

Investment Advisory

Domiciliation & Corporate Secretariat

AIFMD design rules

NON EXHAUSTIVE

Organization design rules

• Global organizational model

• Operational efficiency, quality and risk control

• Existing group capabilities and

resources in other locations

• Existing capabilities and

resources in Luxembourg

• Cost efficiency

• Interdependency of the

risk/valuation/reporting

activities

• Containment of remuneration

rules scope of application

• Scalability and sustainability

through time

• Asset-class specificities

• Tax substance (BEPS, Transfer

Pricing, etc.)

• Eligibility of delegates

Finance

17© 2018 Deloitte

Luxembourg PE/RE fund managers trendsOperating models vary depending on fund manager’s existing organization and goals

Risk Management

Portfolio Management

Valuation

Compliance

Fund Administration

Transfer Agency

• PM more and more retained by the AIFM – need however to demonstrate an analysis capacity at AIFM level

• Ability to delegate PM where Luxembourg established funds are parallel to other vehicles

AIFM PE/RE house

AIFM PE/RE house

AIFM Third-party

AIFM Third Party

AIFM RE house

AIFM RE house

• Valuation generally retained by the AIFM, leveraging existing resources and expertise of the group

• Set-up of valuation committee for governance purposes

• Function nearly exclusively retained at AIFM level

• Easily satisfies the need for Luxembourg substance

• Strong reliance on investor relation teams within the organization

• Fund administration often delegated, by the AIFM or the AIF, to the group to better leverage group expertise and capabilities

• Several models exist (among which the use of a third party provider as a “front”)• Corporate secretariat generally performed out of Luxembourg

• Transfer agency generally entrusted with a specialised third-party• Processing out of Luxembourg source of complexity• However, strong cooperation with investor relation teams to maintain up-to date

information in register

• Existing group resources generally used to collect, compile and produce risk metrics

Points of attention/related topicsFunction Market practice

Only one of the

core functions

may be delegated

and critical mass

of activities must

remain within

AIFM (“51%

rule”)

Third party

Third party

Low substance

High substance

18© 2018 Deloitte

The new Circular covers all dimensions of an AIFM with a strong focus on internal controls, substance and governance

CSSF Circular 18/698 at a glance

Management companies and AIFMs, as well as management companies subject to chapters 16 and 17 of the 2010 Law (together referred to as “GFI”)

Luxembourgish entities acting as transfer agent for investment funds

CSSF Circular 04/155 and IML Circular 98/143 no longer applicable to GFIs (both circulars included into 18/698)

Repeals CSSF Circular 12/546, as amended Amends CSSF Circulars 11/512 and 17/671

Comprehensive list of definitions Delegation and Oversight Governance AML/CFT Etc.

With immediate effect

CSSF Circular 18/698 on the

authorisation and organisation of Luxembourgish investment management companies

Specific provisions on AML/CFT for GFIs and entities carrying out the function of registrar agent

Scope of Application Revised

Rules

Entry into Force

Most salient topics

Sources: CSSF Circular 18/698; Deloitte research and analysis

19© 2018 Deloitte

Highlights of most salient topics

CSSF Circular 18/698 at a glance

Sources: CSSF Circular 18/698; Deloitte research and analysis

Topic Details

Other regulations EMIR, MMFR and MiFID

Specific sections on the application of the European Market Infrastructure Regulation (EMIR), Money Market Fund Regulation (MMFR) and Markets in Financial Instruments Directive (MiFID)

Availability of board members / Fit & Proper Dashboard

Defined thresholds on the time spent and number of mandates for board members: maximum 1,920 hours per annum and 20 mandates;

Introduction of a “fit and proper” dash board for board members and conducting officers

Focus on delegation and oversight aspects

Applicable to all delegated functions (Central Administration, Portfolio Management, Marketing, Valuation) Formalization of the due diligence (i.e. via a report) Detailed content of the due diligence documents (i.e. due diligence questionnaire and report)

Reporting to the CSSF Alignment of the delays within which the annual reports / recurring information have to be transmitted to the CSSF: five months after

the business year-end of the GFI

Internal Governance Risk management

Definition of the three-lines-of-defense model to be applied by GFI Alignment of the risk management requirements for AIFs and UCITS

Relationship with Depositary Exchange of information between the GFI and the depositary for oversight purposes (CSSF circulars 16/644 and 18/697)

Focus on AML / CFT Different scenarios and rules in respect of AML / CFT New annual reporting requirements in the area of AML / CFT to be transmitted to the CSSF

Own fund requirements for extended license

Own funds requirements for GFI with an extended license (i.e. offering discretionary portfolio management and other investment management services)

20© 2018 Deloitte

Luxembourg Tax Topics

21© 2018 Deloitte

New EUPSD

Avalanche of foreign tax reforms at different levels

International context

High impact expected

Low impact expected

NearFar

CbC Reporting

EU-wideFTT

Exchangerulings

EU CRSTP

BEPS Actions 8-10

EU ATAD 1

EU ATAD 2

MLI Non-CIVpaper

EU CCTB

OECD guidance

EU legislation

Domestic legislation

Source of the legislation:

Implementation stage

Drafting or adoption stage

Development stage

Status of the legislation:

22© 2018 Deloitte

§1 – PPT

Notwithstanding any provisions of a CTA, a benefit under the CTA shall not begranted in respect of an item of income or capital if it is reasonable to conclude,having regard to all relevant facts and circumstances, that obtaining that benefitwas one of the principal purposes of any arrangement or transaction thatresulted directly or indirectly in that benefit, unless it is established thatgranting that benefit in these circumstances would be in accordance withthe object and purpose of the relevant provisions of the CTA.

Classical fund structuring models largely endorsed

OECD consultation

on non-CIV funds

Revised OECD MC

of November 2017

Focus on Treaty Abuse

OECD Multilateral Instrument

23© 2018 Deloitte

• On 24 November 2016, the OECD published the agreed wordingof the new multilateral tax treaty (“MLI”) which, among otherthings, is aimed at stopping treaty shopping. Once in effect, theintention is that the new MLI will override and complement certainprovisions in existing double tax treaties:

In particular, the intention is that it should result in either aprincipal purpose test (“PPT”) or limitation of benefits (“LOB”)being included in all treaties to which it is applied. The purposeof these tests is to deny treaty relief where the recipient of theincome or gain does not meet certain conditions.

As at 30 May 2018, 78 countries have signed up the MLI and 6have formally expressed their intention to sign it up. As part ofthe process, most of countries have also confirmed whichoption they intend to follow in the case of the treaty shopping(i.e. PPT or PPT with simplified LOB or detailed LOB with PPT).

It should be noted that no countries can unilaterally decidewhat MLI provisions will apply to what treaties. They can statewhat options they are choosing but the overall impact thendepends on whether the counterparty to the original treatyhas chosen the same option or not.

• Within an EU context, it should be noted that the PPT approachwas already introduced in the amended EUPSD and in the ATAD.

APPROACH OF THE MAJOR JURISDICTIONS

Country MLI Position Option chosen

Australia MLI signed PPT approach

Austria MLI signed PPT approach

Belgium MLI signed PPT approach

Brazil MLI not yet signed Option not chosen yet

Canada MLI signed PPT approach

China MLI signed PPT approach

Czech Republic MLI signed PPT approach

Denmark MLI signed PPT approach

Finland MLI signed PPT approach

France MLI signed PPT approach

Germany MLI signed PPT approach

Hungary MLI signed PPT approach

India MLI signed Simplified LOB with PPT approach

Ireland MLI signed PPT approach

Italy MLI signed PPT approach

Luxembourg MLI signed PPT approach

Mexico MLI signed Simplified LOB with PPT approach

Netherlands MLI signed PPT approach

Norway MLI signed PPT approach

Poland MLI signed PPT approach

Portugal MLI signed PPT approach

Spain MLI signed PPT approach

Sweden MLI signed PPT approach

Switzerland MLI signed PPT approach

UK MLI signed PPT approach

US No intention to sign Detailed LOB approach already in place

* To be further confirmed whether each jurisdiction will focus on substance or purpose and how the PPT should be interpreted in each domestic law.

OECD Multilateral Instrument

Focus on Treaty Abuse – PPT

24© 2018 Deloitte

Article 7§1 MLI – PPT

Notwithstanding any provisions of a CTA, a benefit underthe CTA shall not be granted (…) if it is reasonable toconclude, having regard to all relevant facts andcircumstances, that obtaining that benefit was one ofthe principal purposes of any arrangement ortransaction that resulted directly or indirectly in thatbenefit, unless it is established that granting thatbenefit in these circumstances would be inaccordance with the object and purpose of therelevant provisions of the CTA.

GAAR – ATAD 1

A Member State shall ignore an arrangement or a series ofarrangements which, having been put into place for themain purpose or one of the main purposes ofobtaining a tax advantage that defeats the object orpurpose of the applicable tax law, are not genuinehaving regard to all relevant facts andcircumstances.

SUBJECT TO ECJ CASE LAW FOR EU STRUCTURES 12 September 2006, Case C-196/04 Cadbury Schweppes plc6 April 2017, Cases C-504/16 and C-613/16 Juhler Holding A/S & Deister Holding AG

Anti-abuse rules must be exclusively directed at ‘‘wholly artificial arrangements’’ (primacy of freedom ofestablishment)

Substance

interpretation

Purpose

interpretation

Equivalent

beneficiaries

interpretation

PPT = All of the above ?

OECD Multilateral Agreement

Interpretations of the PPT

25© 2018 Deloitte

The trend: substance & business purpose

Structuring in a changing environment

We witnessed a change in the way AIFs are operating over the last decade in reaction to the avalanche of EU/OECD tax reforms.

Low economic & commercialrationale, use of Luxembourg ismainly tax driven

Indofood case, HRMCguidance on BO, severaldomestic legislation onBO, etc.

BEPS, ATAD, CbCR,Amended EUPSD, severaldomestic legislation, etc.

Use of silos headed byLuxembourg SPVs withexternal substance

Trend to implement itsown substance or rely ona consolidated modelwhich should be justifiedby wider economic &commercial rationale

Convergence betweenAIFMD & Tax providingsustainability to thebusiness model

2000 2006/08

2018

Timeline

26© 2018 Deloitte

AIFMD as a Non Tax Purpose Structuring in a changing environment

AIFMD aims at

− Regulating AIF industry

− Achieving single EU AIF market

− Increasing transparency

− Controlling systemic risks

AIFMD contains NO tax provisions but because it will impact organizational / business model and people on a cross-border basis tax questions have to be addressed to make the implementation a success.

AIFMD also provides opportunities to align regulatory and tax substance. It provides a non tax purpose.

27© 2018 Deloitte

Example of a possible structure

Structuring in a changing environment

EU entities

Lux SPV 1 Lux SPV 2 Lux SPV 3

EU entitiesEU entities

Lux AIFM

Distribution of

the AIF to EU

investors

Parallelfund

Parallel

structure

Foreign IM

Non-AIFM GP

Lux (R)AIF

Master(RAIF-SICAR/Soparfi)

Distribution to non- EU

investors through a parallel

structure to segregate cost

& compliance

• Pooling regional platform possibly qualifying to PPT for DTT purposes

• PPT / GAAR test to be discussed

• Impact of the MLI to be investigated on a source country by source country basis

• Anti-hybrid rules and imported mismatch to be considered

• Management activities and fund consolidated in one place

• Substance and functions (including the oversight of delegation) required illustrating the convergence between tax and the AIFMD

• Cross-border management allowed within the EU

• BEPS development on the definition of PE to be monitored (action #7)

It could be

a 3rd party

Depositary, central

administration in

Lux.

EU investors Non-EU investors

28

© 2018 Deloitte

Asset Management

Transfer Pricing Market Trends

Governance

• Traditionally, regulatory focus has been on aspects of substance and organization, risk management, transparency, and reporting. Some regulators (e.g. in Luxembourg) have already adopted very precise rules on governance that detail the role and responsibilities of the governing and management bodies in the AM and WM sector

• Intensive scrutiny over governance arrangements is a clearly observed trend in the supervisory approach adopted by regulators all over Europe. The aim is to limit regulatory competition and arbitrage in Europe

• Increasing regulation, greater interaction between the regulatory and tax dimension as well as Brexit also lead to additional focus on tax as governance topic

• “Enforcement” is so far informal as part of on-site visits with focus on transfer pricing policies, intra-group legal agreements and transfer pricing documentation

• In addition to traditional indicators, tax governance has also become one of the indicators of proper management of regulated entities

• Importance of consistency of regulatory application/filings with tax position and messaging to regulators/tax authorities

1

2

3

4

5

6

Governance

Increased focus by regulators on tax as part of corporate governance

function

Transparency

Increased focus ontransfer pricing documentation

Industry

Move to regulatedstructures under

AIFM regime

Models & policies

Appropriateness and defensibility of

existing TP models and policies

Substance

Overlapping discussion on substance from a tax

and regulatoryperspective

Politicalenvironment

BEPS, Brexit,and EU state aid

Tax audit

environment

29

© 2018 Deloitte

• BEPS impact on the appropriateness of existing TP policies and approaches specific to the asset management sector

• Remuneration (for tax purposes) of the unique role of captive ManCos depending on delegation model/functional profile vs. unregulated structures

• Defensibility of one-sided approaches, i.e. where captive ManCo under delegation model retains residual profits

• Cost plus arrangements (e.g. for distribution related activities)

• Permanent establishment thresholds

• Approaches to support split of management fees for the remuneration of

• Distribution and capital raising

• Portfolio management

• Fund production (principal function of ManCo)

• Fund administration, back-office services and other support functions

• Revisiting legacy of tax arrangements

• Rulings with goodwill deductions, investment grants or cost plus arrangements

• Restructurings and transfer of activities

• Brexit-related on-shoring of activities in Luxembourg with question on exit tax/valuations

1

2

3

4

Governance

Increased focus by regulators on tax as part of corporate governance

function

Transparency

Increased focus on transfer pricing documentation

Industry

Move to regulatedstructures under

AIFM regime

Models & policies

Appropriateness and defensibility of

existing TP models and policies

Substance

Overlapping discussion on substance from a tax

and regulatoryperspective

Politicalenvironment

BEPS, Brexit,and EU state aid

Tax audit

environment

Asset Management

Transfer Pricing Market Trends

32

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