Based on domestic law, a company is considered to be resident in Luxembourg if either its registered office or place of central administration is located in Luxembourg. The registered office is designated as such in the company’s articles of incorporation.
The place of central administration is generally understood to mean the place where the company is managed and controlled. While this term is not legally defined, the location of the company’s major establishment is determined by facts and circumstances, including the following:
- The place where meetings of the board of directors are held.
- The place where shareholders meetings are held.
- The place where the company’s officers make their decisions.
- The place where the company’s books and records are kept.
- The place where other, similar factors evidencing management control occur.
Permanent establishment (PE)
The provisions on PEs included in the tax treaties concluded by Luxembourg generally follow the wording of the OECD model.
Under Luxembourg domestic tax law, a similar PE concept exists but is defined in a broader way and is to be understood as every fixed piece of equipment or place that serves for the operation of an established business.
Please see the Significant developments section regarding new developments on the notion of PE under Luxembourg domestic law.