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At the heart of regulatory and tax environments

Professionals of the Financial Sector (PSF) in Luxembourg

Given the considerable size of today’s Professionals of the Financial Sector (PSF) market, we thought it appropriate to share with you our understanding of the current, highly specific PSF environment.

On 3 December 2021, the proposal for the third Anti-Tax Avoidance Directive (ATAD 3) was officially published, and further amended in January 2023 by the Committee on Economic and Monetary Affairs (ECON Amendments). ATAD 3, building upon the foundations of ATAD and ATAD 2, seeks to close any remaining loopholes and address emerging tax avoidance challenges.

CSSF Circular 22/806 amended and expanded the scope of CSSF Circular 20/758, including both business process outsourcing and ICT outsourcing. In addition, several CSSF circulars regarding ICT outsourcing legislations will be either repealed (13/554, 15/611, 17/654) or amended (12/552, 18/698).

This 2023 edition of our guide aims to provide you with a detailed view of this ecosystem, without being strictly exhaustive as per the latest changes. This is an overview.

In the first chapter, we address the essential aspects of the legal and regulatory framework. We primarily cover the authorization and licensing procedure, but also the supervision resources of the Commission de Surveillance du Secteur Financier, the supervisory authority, and the role played by réviseurs d’entreprises agréés who contribute to that supervision.

Chapter two describes the tax environment of PSF from a direct corporate tax and VAT perspective. This chapter further highlights some hot tax topics applicable to PSF and gives an overview of incentives relevant to the PSF industry.

Lastly, we present a profile analysis of PSF, together with individual fast-reference sheets for each PSF setting out the most significant characteristics.

We hope you will gain a deeper insight into PSF regulation and enjoy this regulatory update.

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